Investors Propose Splitting CEO and Chairman Roles at TotalEnergies to Accelerate Fossil Fuel Transition

The board of TotalEnergies will determine on April 25 whether this resolution will be included in the AGM agenda.

A coalition of investors has proposed a resolution to separate the CEO and chairman roles at TotalEnergies, aiming to accelerate the company’s transition from fossil fuels.

The resolution, scheduled for discussion at the annual general meeting on May 24, was initiated by 19 international investors who own approximately 20 million shares, along with contributions from the Swiss Ethos Foundation and the French Sustainable Investment Forum (FIR).

Patrick Pouyanne, who has served as both CEO and chairman at TotalEnergies for nearly ten years, has led the fifth-largest oil company in the world through a phase of expanding oil and gas production while also boosting renewable energy investments.

However, the investors behind the resolution believe that separating these roles could enhance discussions on climate strategies and ensure a more balanced power dynamic within the company.

They argue that this change is necessary because many feel that TotalEnergies’ current approach to transitioning away from fossil fuels lacks ambition.

The board of TotalEnergies will determine on April 25 whether this resolution will be included in the AGM agenda.

A company spokesperson emphasized that under French law, decisions regarding the structure of corporate governance, such as separating or combining the roles of chairman and CEO, are the prerogative of the board.

They also noted that a shareholder resolution on this matter might be deemed inadmissible due to its advisory nature.

In recent years, climate-conscious investors have increasingly pressured major oil and gas companies to reduce carbon emissions and shift away from fossil fuel production.

At last year’s AGM, 30% of TotalEnergies’ investors supported a call for more rapid emission reductions, which was not in line with the company’s recommendations.

Vincent Kaufmann, CEO of Ethos Foundation, expressed frustration that the board seemed unresponsive to investor demands for more aggressive climate action.

He stated, “We really get the feeling that those investors weren’t heard by the board.”

The proposal to challenge Pouyanne’s leadership was considered, but the decision was made to take a more constructive approach through a consultative poll on governance models.

Pouyanne is slated for re-election for another three-year term at the upcoming AGM. Notably, among companies listed on France’s CAC 40 index, fourteen have opted to split the roles of chairman and CEO since 2016, while twelve maintain a combined role.

The resolution highlighted that a board chair’s ability to set agendas and manage investor proposals is significant.

In 2022, the board under Pouyanne declined to bring a climate-related resolution to a vote due to a contentious technicality.

Meanwhile, Jacques Aschenbroich, TotalEnergies’ lead independent director, defended Pouyanne’s combined role, praising the streamlined command it provides in negotiations.