ExxonMobil has acknowledged that shareholders at its AGM today voted to install two director nominees from activist investor Engine No 1.
In a statement available at the time of writing, the company says that based on preliminary vote estimates shareholders elected eight ExxonMobil nominees to the board and that vote results for five nominees are too close to call. One of Engine No 1’s nominees was not elected, according to the energy company.
Shareholders at the ExxonMobil and Chevron AGMs today also voted on shareholder proposals requesting climate-related accounting looking at whether and how a sharp drop in fossil fuel demand as described in the International Energy Agency’s net-zero by 2050 scenario and report would affect each company’s financial position and underlying assumptions.
According to As You Sow, the Chevron resolution received 48 percent support based on preliminary figures. A Chevron spokesperson says: 'Chevron values feedback from stockholders. The board will carefully consider the voting results of the annual meeting and will continue to engage with our stockholders on this important issue.' The result of proposal filed with ExxonMobil was not available at the time of writing.
Engine No 1 had nominated four individuals to the ExxonMobil board in what it says is an effort to build shareholder value amid shifts in the energy sector due to the climate crisis. On its website, the investor says: ‘No public company in the history of oil and gas has been more influential than ExxonMobil, and yet the company has failed to evolve with the industry’s transition, resulting in significant underperformance to the detriment of shareholders.
‘The energy industry and the world are changing. To protect and enhance value for shareholders, we believe ExxonMobil must change as well. We believe that for ExxonMobil to avoid the fate of other once-iconic American companies, it must better position itself for long-term, sustainable value creation.’
ExxonMobil chair and CEO Darren Woods says in a statement on the preliminary vote results: ‘We welcome all of our new directors and look forward to working with them constructively and collectively on behalf of all shareholders.’
He adds: ‘We’ve been actively engaging with shareholders and received positive feedback and support, particularly for our announcements relating to low-carbon solutions and progress in efforts to reduce costs and improve earnings. We heard from shareholders today about their desire to further these efforts, and we are well positioned to respond.’
ExxonMobil says it has developed ‘a portfolio of investment opportunities in high-return, low cost-of-supply projects. The company has also significantly reduced emissions and set clear plans for further reductions to 2025, consistent with the goals of the Paris Agreement.’
It adds that the board will reconsider two shareholder proposals that received majority shareholder support, which call for a report on lobbying and a report on climate lobbying.
Environmental Defense Fund president Fred Krupp says in a statement on the vote results: ‘This was a watershed moment for the oil and gas industry and leading investors: It is no longer tenable for oil companies like ExxonMobil to defy calls to align their business strategies with a decarbonizing economy.’
He adds: ‘The test of the enhanced board will be its ability to get ExxonMobil aligned with a net-zero transition in the months to come – with a credible business strategy backed by climate targets, dollars and policy advocacy.’
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
