Activist Likely to Achieve 3rd Seat on Exxon Board

An activist investor is probable to choose up a 3rd seat on the board of


XOM .44%

Mobil Corp., supplying it extra leverage to press the oil huge to handle investor discontent about diminished income and its fossil-gas focused approach amid fears about local climate modify.

Exxon claimed Wednesday that an up-to-date vote depend showed shareholders backed a 3rd nominee of Engine No. 1, an upstart hedge fund that had presently received two board seats at Exxon’s annual shareholder assembly very last 7 days. The last vote hasn’t been qualified, Exxon reported, and could choose days or weeks to be finalized, in accordance to people common with the matter.

Motor No. 1, which owns a tiny portion of Exxon’s inventory, experienced sought 4 seats on the board and argued the Texas oil big should commit to carbon neutrality, successfully bringing its emissions to zero—both from the company and its products—by 2050, as some friends have. If the preliminary voting benefits keep, it will command a quarter of Exxon’s 12-human being board.

The vote culminated a single of the most pricey proxy fights ever. It puts new strain on Exxon Main Government Darren Woods, who individually campaigned from Motor No. 1 and could complicate his designs to retain Exxon as the major Western oil producer. Mr. Woods was re-elected to the board alongside with 8 of Exxon’s candidates.

The consequence of the shareholder vote puts pressure on Exxon Main Government Darren Woods, proven in New York in March 2017.


brendan mcdermid/Reuters

“We appear forward to performing with all of our administrators to develop on the progress we’ve created to grow long-term shareholder worth and triumph in a reduced-carbon future,” Mr. Woods said in a statement. “We thank all shareholders for their engagement and participation, and their ongoing assist for our firm.”

However Motor No. 1 only owned .02% of Exxon’s stock, it was equipped to capitalize on investors’ fears about Exxon’s new functionality and local weather alter system. Exxon posted a $22 billion decline very last yr, its biggest on file, just after the pandemic crushed gasoline need and upended what turned out to be an sick-timed prepare by Mr. Woods to considerably enhance spending to improve oil and gas output.

A lot of of the world’s largest investment corporations aided elect the fund’s administrators, together with BlackRock Inc., Point out Street Corp. and Vanguard Team, who claimed publicly they wielded votes for buyers in favor of at the very least two dissident directors.

BlackRock voted for 3 directors proposed by Engine No. 1 and explained very last 7 days it thinks Exxon and its board have to have to further assess the possibility that demand from customers for fossil fuels may well decrease swiftly in the coming a long time.

Vanguard voted for two directors proposed by the activist and claimed it had expressed issues to Exxon for several years about the independence of Exxon’s board and its directors’ lack of power sector knowledge.

“And for decades, we did not witness ample progress on both front,” Vanguard claimed past 7 days.

In an job interview with WSJ’s Timothy Puko, U.S. exclusive weather envoy John Kerry clarifies the roles he’d like to see the private sector and nations around the world engage in in preventing weather change. Image: Rob Alcaraz/The Wall Avenue Journal

Engine No. 1 has identified as for Exxon to steadily diversify its investments to be all set for a globe that will need to have fewer fossil fuels in coming many years. It criticized Exxon’s board for presiding around years of very poor fiscal returns and for its unwillingness to reconsider the company’s very long-held check out that oil and gasoline need will continue being sturdy for many years.

“We are grateful for shareholders’ mindful thing to consider of our nominees and are thrilled that these three folks will be working with the total board to support improved placement ExxonMobil for the extensive-expression reward of all shareholders,” an Engine No. 1 spokeswoman claimed.

The hedge fund’s third productive nominee is Alexander Karsner, a former U.S. assistant secretary for electricity efficiency and renewable electrical power and a recent senior strategist at X, formerly recognised as Google X, a subsidiary of tech huge

Alphabet Inc.

Mr. Karsner joins Motor No. 1’s two other effective candidates, Gregory Goff and Kaisa Hietala. Mr. Goff is the previous main govt of Andeavor, which was one the premier U.S. refiners prior to remaining bought for additional than $20 billion by

Marathon Petroleum Corp.

in 2018, even though Ms. Hietala is a former govt vice president of renewable solutions at Finnish refiner

Neste Oyj.

Motor No. 1’s fourth applicant, Anders Runevad, the former main government of Vestas Wind Systems, appeared to arrive up shorter, according to the preliminary vote depend.

Exxon mentioned in a regulatory filing Wednesday that about 67.1% of the vote from its far more than 4.2 billion shares had been counted. According to the preliminary rely, Exxon also missing on two shareholders proposals it had asked traders to vote in opposition to but ended up supported by institutional investors.

Voters controlling practically 56% of eligible shares supported a proposal calling for Exxon to disclose extra about direct and oblique lobbying paying and procedures, while voters controlling approximately 64% of suitable shares voted for Exxon to release a report on how its lobbying aligns with the Paris weather accord. Exxon has expressed community guidance for the Paris arrangement and had pledged to additional lower emissions from its operations.


A lot more on the company’s board, picked by the editors.

Produce to Christopher M. Matthews at [email protected]

Corrections & Amplifications
Exxon Mobil Corp. has about 4.2 billion shares outstanding. An earlier variation of this short article incorrectly said the corporation had 4.2 million shares. (Corrected on June 4)

Copyright ©2020 Dow Jones & Corporation, Inc. All Legal rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8