ExxonMobil pledges two new directors ahead of climate policy showdown
Undertaking comes ahead of shareholder contest over the oil and gas titan’s climate policy and board makeup
ExxonMobil on Monday said it would appoint two new directors with energy industry and climate experience within the next 12 months, a pledge made days before a shareholder contest over the oil company’s climate policy and board makeup.
Shareholders on Wednesday will decide between ExxonMobil’s 12 current directors and four candidates from hedge fund Engine No 1 who have gained support from investors and proxy advisory firms. Its nominees have oil and wind energy, tech and regulatory backgrounds.
Some bankers, analysts and investors viewed ExxonMobil's offer in the letter to shareholders as a reversal in position, calculated to win support from big investors in a close contest.
Shares rose a fraction to $59.21 in recent trading.
“Over the next 12 months, we will work with the board to secure two new directors, one with energy industry experience and one with climate experience,” ExxonMobil wrote.
Engine No 1’s candidates have gained traction with some large pension funds and received support from proxy advisory firms that guide institutional shareholders. The hedge fund wants ExxonMobil to focus more on clean energy and improve its financial performance.
“This is a board that continues to only be open to new directors that it approves, rather than trusting the shareholder vote,” Engine No 1 said in a statement.
“If ExxonMobil’s board is sincere in its desire to add more relevant experience, then it can wait to see what the outcome of this election is,” the statement said.
ExxonMobil declined to comment, referring to the letter and previous statements.
“ExxonMobil does everything for a reason,” said Andrew Logan, a senior director at Ceres, a climate advocacy group. The company’s suggested board expansion appeared to be a last-minute move to sway top ExxonMobil investors Vanguard, State Street and BlackRock, he said.
Exxon added three directors in 2021, and maintained as recently as last week that current board members provided the expertise needed to guide its future.
“We have a board that has a right skill set, a broad skill set, to help manage the challenges that a company like ExxonMobil faces,” CEO Darren Woods said on Thursday.
“We are cynical about the announcement,” said Bess Joffe, head of responsible investment at the Church Commissioners for England.
“Exxon had the opportunity when they appointed two new directors in March to find candidates with these skill sets and failed to do so,” said Joffe.
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