Activist Wins Exxon Board Seats After Questioning Oil Giant's Climate Strategy -- Update
26 Mai 2021 - 8:15PM
Dow Jones News
By Christopher M. Matthews
An activist investor won at least two seats on the board of
Exxon Mobil Corp., a historic defeat for the oil giant that will
likely force it to alter its fossil-fuel focused strategy and more
directly confront growing shareholder concerns about climate
change.
Exxon said Wednesday a preliminary vote count showed
shareholders backed two nominees of Engine No. 1, an upstart hedge
fund owning a tiny fraction of the oil giant's stock. The final
vote wasn't tallied as of early Wednesday afternoon, and the final
composition of the board was unclear. Exxon Chief Executive Darren
Woods was also re-elected to the board along with seven of Exxon's
candidates, while two seats were undetermined, the company
said.
The vote culminated a pitched, monthslong battle to persuade
Exxon shareholders that turned into one of the most expensive proxy
fights ever. It was an enormous blow to Mr. Woods, who personally
campaigned against Engine No. 1. Many viewed the vote as a
referendum on Mr. Woods' performance. Exxon lost a record $22
billion last year and was struggling to regain its status as an
industry-leading profit engine even before the coronavirus pandemic
crushed global demand for oil and gas.
Both sides feverishly made their case to investors until the
last minute. Exxon delayed the closing of the voting by an hour
Wednesday morning and Engine No. 1 said the company was calling
investors to ask them to change their votes. In a message sent to
shareholders, the fund urged them "not to fall prey to any such
strategic efforts."
An Exxon spokesman didn't immediately respond to a request for
comment.
The hedge fund called for Exxon to gradually diversify its
investments to be ready for a world that will need fewer fossil
fuels in coming decades. Exxon defended its strategy to expand
drilling, saying demand for fuels and plastics will remain strong
for years to come, and pointed to a new carbon capture and storage
business unit as evidence it is taking climate change
seriously.
Peter Bryant, a managing partner at business consultant Clareo,
said Exxon was vulnerable because it hasn't provided a good return
from fossil fuels for years and doesn't get credit from
sustainability-focused investors because it hasn't invested in
renewable energy.
"It's the worst of both worlds," Mr. Bryant said.
Engine No. 1 sought four seats on Exxon's board and argued Exxon
should commit to carbon neutrality, effectively bringing its
emissions to zero -- both from the company and its products -- by
2050, as some peers have. It nominated four directors -- Gregory
Goff, Kaisa Hietala, Alexander Karsner and Anders Runevad -- with
varying degrees of experience in energy, technology and regulatory
policy. Mr. Goff and Ms. Hietala were elected Wednesday, according
to the preliminary tally.
Despite only owning about 0.02% of Exxon's stock, Engine No. 1
sought to capitalize on investors' fears about years of shrinking
profits and concerns about the company's future, as governments
increase regulations to address climate change. Engine No. 1
accused Exxon's board of presiding over the company's demise and
argued its own candidates had the qualifications to help Exxon
better navigate the energy transition.
The hedge fund got a big boost from some of Exxon's largest
shareholders. BlackRock Inc. backed three of Engine No. 1's
candidates, the Journal previously reported, and some of the
largest U.S. pension funds also supported the activist's slate.
Asset managers are, themselves, under pressure to exert
influence on their portfolio companies to do more about climate
change. All three have signed a pledge supporting goals to reach
net zero carbon emissions by 2050 or sooner.
Andrew Logan, senior director for oil and gas at Ceres, a
nonprofit focused on sustainability that supported Engine No. 1's
campaign, said it would be difficult for Mr. Woods to retain his
position as CEO after the vote.
"That certainly calls his leadership into question," Mr. Logan
said. "There is no going back to the Exxon of old nor should there
be."
Exxon and Mr. Woods had made a series of changes, long sought by
some investors, since the campaign began, including creating a
business unit for carbon emissions-reducing technologies and
disclosing for the first time the emissions from Exxon
products.
But Engine No. 1 said those moves were inadequate. Despite a
series of calls and meetings, the two sides were unable to agree to
a common set of directors. The fund said Exxon had proposed a deal
of sorts, offering Engine No. 1 in January a chance to rubber-stamp
and take credit for three candidates Exxon later appointed to the
board. Engine No. 1 said it refused.
Exxon said it reviewed Engine No. 1's candidates and determined
they didn't meet the board's standards. In an interview last week,
Exxon lead director Kenneth Frazier said Exxon had asked the fund
to sign a nondisclosure agreement that would have allowed it to
review board candidates Exxon ultimately proposed, but the fund
declined.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com
(END) Dow Jones Newswires
May 26, 2021 14:09 ET (18:09 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Exxon Mobil (NYSE:XOM)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Exxon Mobil (NYSE:XOM)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024