The four new board members nominated by Proxy Advisory Institutional Shareholder Services Activist Hedge Fund face investor revolt at its annual meeting this month after proposing to vote to put pressure on CEO Darren Woods.
Engine No. 1 has funds A board has been called for overhaul and shuffle changes Calling Exxon’s strategy on climate, capital allocation and executive pay, his focus on fossil fuels is creating an “existence risk” for the company.
The May 26 vote will mark one of the largest proxy contests in U.S. corporate history and will reveal the extent of investors’ concerns about the climate risks facing fossil fuel producers.
The ISS advice, circulated to shareholders on Friday, said Engine No. 1 had “filed a mandatory lawsuit for change” and suggested that Exxon’s strategy would remain highly dependent on Rose’s estimates of future oil consumption.
The organization continues to base its strategic decisions on what appears to be highly optimistic demand and technology estimates, and does not provide enough information to shareholders to fully understand how it has prepared for a power change in practice, the ISS said.
Exxon’s “fuel transfer strategy seems to rely heavily on carbon capture, which will likely require government support,” it added.
The ISS offered to vote on Engine No. 1 slate for Gregory Goff, Kaisa Haitala and Alexander Kersner, saying they offered relevant industry experience and energy-changing skills. It did not support the fourth nominee, Anders Runevad, the former head of the wind power company Vestas.
Engine No. 1 said the ISS’s recommendation “further validates our belief that ExxonMobil needs a board to address fundamental issues that include relevant energy industry experience and expertise.”
Speaking to CNBC after the ISS recommendation, Woods disagreed with the ISS, saying Exxon had “one of the strongest boards in corporate America.”
He added that Engine No. 1 was “not interested in getting involved” with Exxon, and that staff would “jeopardize the company’s future and dividends”.
But the ISS statement put significant momentum behind the five-month extension of the fund Proxy promotion.
On Wednesday, UK-based Pensions and Investment Research Consultants, another proxy adviser, backed the fund’s four board nominees and suggested voting against five Exxon board members, including Woods. Glass Lewis, another shareholder adviser, has yet to make his recommendation.
Colstar, Colpars and the New York State Common Retirement Fund – the three largest pension funds in the United States – and wealth management lawyers and general investment management, other Exxon shareholders, have all said they will vote on Engine No. 1 slate.
Exxon’s three largest shareholders, Blackrock, State Street and Vanguard, did not disclose their voting intentions. In January, BlackRock chief Larry Fink threatened climate change at its core. Annual letter To CEOs
In response to investor pressure this year, Exxon has appointed some new board members; Scope 3 reported emissions, or products produced from burning; And Houston has announced a new low-carbon business line and a $ 100 billion carbon capture concept project.
Faced with investor resentment for high costs and debt piles, it has slashed planned capital expenditures and moved away from plans to accelerate oil production over the next four years in March.
The ISS acknowledges these efforts, saying that Exxon workers have “expressed a desire to engage” with shareholders since the pressure began.
ExxonMobil oil competitors in Europe begin building clean fuel capacity, US manufacturers do Resists any pivot away from oil And gas.
Woods said, “We are not in the business of power generation The FT said Recently “What can we bring to opportunities other than check books?”
Action has focused instead Technology as carbon capture And biofuels, although none of them reach sufficient quantities despite the company’s many years of investment.
After four consecutive months of losses last year, it returned to profitability in the first three months of 2021. Since the launch of Engine No. 1, its stock has outperformed its competitors and has risen nearly 50 percent.
The ISS has blamed stock performance “rather than long-term strategic decisions by the board” for putting pressure on shareholders.
Andrew Logan, director of Ceres Oil and Gas, which coordinates investors’ climate action, praised the consultant’s “important decision.”
“It simply came to our notice then. The first goal of Exxon staff, but it will not end, ”he said.