A group of TotalEnergies investors is calling on the company to separate the roles of CEO and Chairman of the Board, a move they believe will help the oil giant, whose annual general meeting takes place next month, with its energy transition.

"Separating the functions could improve dialogue with the Board of Directors (...) on climate transition issues and ensure a better balance of power during a period when many investors believe that TotalEnergies' transition strategy is not ambitious enough," they write in a resolution to be proposed at the Annual General Meeting on May 24.

The proposal comes from 19 international TotalEnergies investors holding a total of around 20 million shares in the Group, the Swiss pension fund manager Ethos Foundation and the French Forum for Responsible Investment (FIR).

It calls into question the hegemony of Patrick Pouyanné, who has been CEO of TotalEnergies for almost a decade, overseeing a strategy designed to increase oil and gas production while giving greater prominence to renewable energies.

Patrick Pouyanné's three-year reappointment is to be put to the vote at the Annual General Meeting.

"In France, corporate governance is, by law, a responsibility of the board of directors," said a TotalEnergies spokesperson. "The Board of Directors should not consider such a resolution admissible," he added.

In recent years, climate-conscious investors have been putting pressure on the world's leading oil and gas groups to reduce their carbon footprints and implement an ambitious energy transition.

A RESOLUTION PRESENTED AS "CONSTRUCTIVE

At TotalEnergies' previous Annual General Meeting last year, 30% of investors voted in favor of a resolution calling on the group to align its 2030 carbon emission targets for products used by its customers with the Paris Agreement. The resolution was not adopted, in line with TotalEnergies' wishes.

"We really have the impression that this category of investors has not been heard by the Board," said Ethos CEO Vincent Kaufmann, adding that these investors were now questioning Patrick Pouyanné's re-election.

"We wanted the resolution here to be more constructive. It's not a frontal attack. It's more a question of sounding out investors on the best governance model to apply in a company like Total", he said.

Since 2016, fourteen CAC 40 companies have split the roles of chairman and CEO, while twelve still stick to a single position.

The resolution prepared by TotalEnergies' investor group highlights that the chairman of the board has the authority to set the agenda and screen investor requests. According to the document, in 2022 the board refused to put a resolution related to climate change to the vote, citing a technical detail that was much debated.

At TotalEnergies, the lead director, whose role is to identify possible conflicts of interest and act as a counterweight to the sole power held by the CEO, can be dismissed at any time by a vote of the board.

Jacques Aschenbroich, Lead Director and Chairman of TotalEnergies' Governance and Ethics Committee, last month defended the uniqueness of the functions of Chairman and CEO. "This method of managing TotalEnergies is considered to be the best suited to meeting the challenges and specificities of the energy sector, which is facing major transformations", he said.

"This context requires agility of movement that the unity of command reinforces, by giving the CEO a strength of action and a greater representativeness of the company in its strategic negotiations with the States and partners of TotalEnergies", he added.

(America Hernandez reporting; Jean Terzian, edited by Blandine Hénault)