"Change Is Coming" - Engine No. 1 Wins Two Exxon Board Seats  

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by Tyler Durden
Wednesday, May 26, 2021 - 07:25 PM

Activist firm Engine No. 1 has won at least two seats on the board of Exxon Mobile Corp. following a multi-month battle over the oil giant's board of directors to change the company's path towards one centered around achieving net-zero carbon emissions by 2050 or sooner, according to WSJ.

Engine No. 1, an upstart hedge fund, owns a tiny 0.02% stake in Exxon, has gone on a blitz against the company since December to shift away from fossil fuels to a zero-carbon world. The fund was founded by veteran hedge fund investor Chris James. 

Charlie Penner, one of Engine No. 1's leaders, told investors at Wednesday's annual shareholder meeting that Exxon management is "determined to fight off the future for as long as possible," but added: "change is coming."

According to Reuters, BlackRock, the world's largest asset manager, owns a 6.7% stake in Exxon and gave full support to Engine No. 1 mission to force new change on the company's board. The activist fund won support from Legal & General, one of Exxon's top 20 investors. They also gained support from large pension funds, including CalPERS, calSTRS, and New York State Common Retirement Fund.

Engine No. 1 pushed to add four new members to Exxon's board. A tally so far shows the activist fund has won at least two seats.

Wednesday's vote came during Exxon's annual shareholder meeting, where CEO Darren Woods responded to questions about Exxon's investments in carbon capture technology.

“ExxonMobil is in a strong position to create differentiating value throughout the energy transition,” CEO Darren Woods said, touting Exxon's oil-and-gas portfolio and its investment in climate technologies.

"We welcome the new directors Gregory Goff in Kaisha Hietala to the board and look forward to working with them constructively and collectively on behalf of all shareholders," Woods said.

Exxon shares have collapsed over the past few years but have doubled off the double-bottom lows of March and October of last year...

“This is a landmark moment for Exxon and for the industry, and will accelerate needed change in the sector,” said Andrew Logan, senior director for oil and gas at Ceres, which co-ordinates investor climate action.

“Nothing focuses a director’s mind like the possibility that they might lose their job. Today that risk became very real,” he added.

What is most shocking is how a tiny upstart fund with a small position in the company could gain enough (woke) support from top shareholders to force change within the company.

“That certainly calls his leadership into question,” Mr. Logan said. “There is no going back to the Exxon of old nor should there be.”