TotalEnergies investors call for split of CEO and chair roles

A group of TotalEnergies investors is calling for the French oil and gas major to split the roles of CEO and chairman, which they say could speed up its shift away from fossil fuels. The resolution to be proposed for inclusion at TotalEnergies' annual general meeting on May 24 was put forward by 19 international investors holding around 20 million shares, together with Swiss pension fund investor group Ethos Foundation and the French Sustainable Investment Forum (FIR).

Patrick Pouyanne has been CEO and chairman at the world's fifth-largest listed oil company for nearly a decade and spearheaded a strategy of growing oil and gas output while also increasing renewable energy. "The separation of functions could improve dialogue with the board ... on climate transition issues and ensure a better balance of power at a time when many investors are of the opinion that TotalEnergies' transition strategy is not ambitious enough," the resolution says.

TotalEnergies does not envision a major reduction in emissions from its products by 2030. TotalEnergies' board of directors will decide at an April 25 meeting whether the resolution will be accepted and added to the AGM agenda for a shareholder vote, a company spokesperson said. "In France, the choice of governance of the Company through a combined or dissociated Chairman and CEO role is by law a competence of the Board of directors," they said on Thursday. "A shareholder's resolution is likely to be regarded as inadmissible in this context, regardless of its advisory nature," they added.

Climate-focused investors have increased pressure on the world's top oil and gas companies in recent years to cut carbon emissions and move away from fossil fuels production. "We really get the feeling that those investors weren't heard by the board," said Ethos Foundation CEO Vincent Kaufmann. "There was a question about whether to vote against Pouyanne's renewal, but we wanted it to be constructive, not a frontal attack, so this is a consultative poll about what the best governance model should be," Kaufmann added.

Pouyanne is up for another three-year mandate at the AGM. Fourteen companies listed on France's CAC 40 index have split the roles of chairman and CEO since 2016, while 12 still have them combined. A board chair has the power to set the agenda and filter investor requests, says the resolution, adding that in 2022 the Pouyanne-led board declined to submit a climate-change-related resolution to a vote on a technicality that was much debated.

Under TotalEnergies' rules, the lead independent director, who is meant to identify conflicts of interest and to be a counterweight to Pouyanne's dual position, can be dismissed by a vote from the board at any time. Jacques Aschenbroich, TotalEnergies' lead independent director, last month defended Pouyanne's dual role, citing the "unity of command" it provides in negotiations with countries and other companies.