Exxon adds 2 to board after criticism
Moves aim to ease capital allocation and climate concerns.
Exxon Mobil Corp. appointed climate-minded activist investor Jeff Ubben and former Comcast Corp. executive Michael Angelakis to its board after investor criticism of the oil giant for its environmental record and poor capital allocation over the last decade.
The additions bring the number of directors on the board to 13, with seven joining since 2016, Exxon said in a statement. Bloomberg News first reported Ubben was being considered for the role last month. Exxon rose 3.7% for its biggest daily gain in three weeks.
The oil explorer has long attracted criticism for its persistent focus on fossil fuels and unwillingness to commit to zero-carbon targets, but those attacks intensified recently after its financial performance dwindled.
Exxon is embroiled in a proxy battle with activist investor Engine No. 1, which has taken the board to task over both its approach to climate change and its track record of spending money on projects that yield weak returns.
“While ExxonMobil has now conceded the need for board change, what is missing are directors with diverse track records of success in the energy industry who can position the company for success in a changing world,” Engine No. 1 said in a statement. The investor is still moving forward with its proxy contest.
D.E Shaw, another Exxon investor that has pushed for changed, welcomed the appointment of the two directors, saying that they would add “significant capital markets and capital allocation experience” while “navigating the transition to a lowcarbon future.”
The board appointments follow a series of moves by the company to appease shareholders ahead of its annual meeting in May. Exxon announced new emissions targets, increased climate disclosure and cut capital spending by $10 billion a year all the way out to 2025. Last month, the company tapped former Petronas Chief Executive Tan Sri Wan Zulkiflee Wan Ariffin to join the board.
Whether those moves will be enough to placate investors remains to be seen.
In 2020, the stock lost 41% and the company incurred its first annual loss in at least four decades. Years of elevated spending on new oil and gas operations left it highly exposed to the crude price crash caused by the COVID-19 pandemic. Exxon also recently wrote down $19.3 billion of assets and reduced its reserves by almost a third.
“Michael and Jeff’s expertise in capital allocation and strategy development has helped companies navigate complex transitions for the benefit of shareholders and broader stakeholders,” CEO Darren Woods said in a statement. “Their contributions will be valued as Exxon Mobil advances plans to increase shareholder value by responsibly providing needed energy while playing a leadership role in the energy transition.”
Ubben founded ValueAct Capital Management two decades ago. He left ValueAct in June to launch Inclusive Capital Partners, which is focused on investing in companies with a social or environmental angle. Ubben resigned from the board of power provider AES Corp., the company said Monday.
Angelakis led strategic planning at Comcast and oversaw the company’s “successful transition into media and other technologies,” Exxon said.