Exxon pushed by green activist investor
Oil giant pressured to put more focus on renewable energy
An activist investor has launched a proxy fight against Exxon Mobil, pressuring the U.S. oil giant to focus more on renewable energy to improve its financial performance.
Engine No. 1, a San Franciscobased investment firm founded by technology hedge fund veteran Chris James, on Wednesday nominated four candidates to join Exxon’s board of directors. The four independent nominees — Gregory Goff, Kaisa Hietala, Alexander Karsner and Anders Runevad — all have experience in oil and gas and renewable energy. The firm’s move Wednesday officially launches its proxy fight to wrest control over the company’s direction.
“Investors increasingly want to see companies focused on the long-term and ExxonMobil is no exception,” Engine No. 1 said in a statement. “We believe that ExxonMobil’s board needs new members who have proven success positioning energy companies for today as well as tomorrow, and who are sufficiently independent from the current board to ensure a clean break from a strategy and mindset that have led to years of value destruction and poorly positioned the company for the future.”
Exxon on Wednesday said it has engaged with Engine No. 1 since mid-December and will evaluate the firm’s nominees. It said the company will continue to update shareholders in the coming weeks on its long-term strategy and actions to address climate change, including initiatives to commercialize technologies that could reduce emissions and meet societal goals consistent with the Paris Agreement.
“ExxonMobil remains committed to investing in the company’s industry-leading advantaged opportunities, significantly reducing costs and improving operational performance to deliver improved shareholder returns and maintain a strong and reliable dividend,” the company said in a statement.
Details about Exxon’s 2021 annual meeting have not been released. The company, which has
paid shareholder dividends for more than 100 years, on Wednesday said it will pay a dividend of 87 cents per share during the first quarter, the same as the previous period.
Exxon, the world’s most valuable company just eight years ago, faces mounting pressure from some investors to change course as it reels from the worst oil bust in decades driven by the pandemic. The Irving company has slashed billions of dollars from its capital budget, frozen its dividend for the first time in nearly four decades and is laying off thousands of workers.
During the downturn, Exxon’s market value has plunged by more than 50 percent to $192 billion. Last year it was removed from the list of companies that make up the Dow Jones Industrial Average. Exxon’s exit left Chevron as the only energy stock on the Dow.
Engine No. 1, which is supported by one of the nation’s largest pension funds
— California State Teachers Retirement System — sent a letter last month to Exxon’s board pushing for the embattled energy company to address the risk posed by climate change to its business. The activist investor wants Exxon to “re-energize” itself by investing more money into renewable energy, refreshing its board and overhauling its executive compensation.
Exxon shares fell 1.1 percent to $45.35 Wednesday.