Activist Likely to Gain Third Seat on Exxon Board--2nd Update

By Christopher M. Matthews 

An activist investor is likely to pick up a third seat on the board of Exxon Mobil Corp., giving it additional leverage to press the oil giant to address investor concerns about climate change.

Exxon said Wednesday that an updated vote count showed shareholders backed a third nominee of Engine No. 1, an upstart hedge fund that had already won two board seats at Exxon's annual shareholder meeting last week. The final vote hasn't been certified, Exxon said, and could take days or weeks to be finalized, according to people familiar with the matter.

"We look forward to working with all of our directors to build on the progress we've made to grow long-term shareholder value and succeed in a lower-carbon future," Exxon Chief Executive Darren Woods said in a statement. "We thank all shareholders for their engagement and participation, and their ongoing support for our company."

Engine No. 1, which owns a tiny fraction of Exxon's stock, had sought four seats on the board and argued the Texas oil giant should commit to carbon neutrality, effectively bringing its emissions to zero -- both from the company and its products -- by 2050, as some peers have. If the preliminary voting results hold, it will control a quarter of Exxon's 12-person board.

Last week, Mr. Woods was re-elected to the board along with seven of Exxon's candidates, while the vote was too close to call for five nominees seeking the two remaining seats.

The vote culminated one of the most expensive proxy fights ever. It puts new pressure on Mr. Woods, who personally campaigned against Engine No. 1 and could complicate his plans to maintain Exxon as the largest Western oil producer.

Engine No. 1 has called for Exxon to gradually diversify its investments to be ready for a world that will need fewer fossil fuels in coming decades. It criticized Exxon's board for presiding over years of poor financial returns and for its unwillingness to reconsider the company's long-held view that oil and gas demand will remain robust for decades.

Write to Christopher M. Matthews at [e-mail]

(END) Dow Jones Newswires

June 02, 2021 17:08 ET (21:08 GMT)

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