Reposted from The Chevron Pit.
Chevron CEO John Watson and his Board of Directors seemed terribly out of touch at the company's annual meeting this week where they were once again pounded by the environmental group Amazon Watch and its allies. Watson simply refused to deal with his two key challenges: the $11 billion Ecuador pollution judgment, and climate change.
For shareholders, it was hardly a performance that inspires confidence in the future. Chevron's revenues are down 75% compared to last year and its stock price continues to lag behind other oil majors. Nobody wants a Luddite running an oil company, but that is what Watson is in danger of becoming.
On Ecuador, Watson arrogantly dismissed renowned indigenous leader Humberto Piaguaje. A Secoya elder who has seen his village devastated by Chevron's pollution, Piaguaje had traveled from his jungle home to company headquarters to confront Watson directly about the enormous court judgment won by thousands of villagers in 2013. The decision against Chevron has been confirmed by no fewer than 18 appellate judges in Ecuador and Canada. Yet Watson refuses to pay up, prompting the villagers to try to seize company assets in Canada .
After Piaguaje asserted that Chevron's "blame the victim" strategy in Ecuador was racist, Watson became visibly flustered and turned off the microphone after saying, "I've been trying to answer questions on Ecuador for seven years. I am not going to take any more questions." (For more details, see this account from Amazon Watch and this article by Courthouse News.)
Watson -- who received $22 million in compensation last year -- was even more arrogant on the climate change issue. In contrast to several European-based oil majors, Chevron under Watson's leadership opposed all six resolutions designed to drag the company into the modern world on the issue. The company seems incapable of dealing with its stranded asset problem as the world transitions to clean energy. That's how poor corporate citizenship and flawed business decision making combust into a perfect storm of stupidity.
Here are some more signs from the annual meeting that Watson has his head in the sand:
**He did not acknowledge that Chevron faces the seizure of billions of dollars of company assets in Canada, where the country's Supreme Court recently ruled for the villagers. Chevron is on the firing line of one of the most important environmental cases in history, yet Watson was mum about what appears to be a very serious threat to the company's business model.
**Watson was silent on how Chevron's key witness from Ecuador has repudiated his own testimony and admitted lying to get more money from the company. Chevron has paid the witness at least $2 million and moved his entire family to the U.S.
**Watson completely ignored a whistleblower video that shows Chevron scientists trying to defraud Ecuador's courts by hiding evidence of the company's pollution.
**Watson failed to beat back a shareholder resolution from Newground Social Investment critical of Chevron's mishandling of the Ecuador litigation. The resolution received support from 30% of all shareholders -- a biting rebuke to company management, which has spent an estimated $2 billion and used 60 law firms to fight the villagers.
**Watson also refused to discuss how the company recently dropped a key legal claim against the villagers because its arguments were certain to be rejected by courts.
**Finally, Watson again failed to acknowledge the humanitarian catastrophe in the area of Ecuador where the company operated from 1964 to 1992. Cancer rates have skyrocketed and hundreds if not thousand of people have died from oil-related diseases since Texaco (bought by Chevron in 2002) started systematically dumping toxic waste into the Amazon in the 1960s.
Watson was the Chevron executive who in 2001 fought hard for the merger with Texaco knowing that it had left billions of gallons of toxic waste in its wake. Watson didn't respect the sophistication and determination of indigenous groups at the time; he obviously still doesn't.
Chevron Board members who are paid around $400,000 per year remain silent in the face of this fiasco.
What a sorry commentary on the company and its leaders.