A long-lasting battle for seats on the ExxonMobil board between the company and activist firm Engine No. 1 is coming to a close with the election of ten new nominees.
Based on preliminary vote estimates by its proxy solicitor, shareholders elected eight of ExxonMobil nominees to the board of directors and two of Engine No. 1 nominees.
According to the company’s statement from Tuesday, vote results for five nominees were too close to call.
In March, Engine No. 1 asked shareholders to vote against the re-election of former MetLife CEO Steven Kandarian , former Caterpillar CEO Douglas Oberhelman , former IBM CEO Samuel Palmisano , and the former CEO of Malaysia’s oil firm Petronas Wan Zulkiflee Wan Ariffin .
The reasoning behind this was the fact that Engine No. 1 is focused on renewables and the transition of ExxonMobil. And has previously stated that the supermajor was falling short of what was expected regarding reaching climate goals set by the company.
The re-elected ExxonMobil directors were CEO Darren Woods , Michael Angelakis , Susan Avery , Angela Braly , Ursula Burns , Kenneth Frazier , Joseph Hooley , and Jeffrey Ubben . Elected from Engine No. 1’s nominees were Gregory Goff and Kaisa Hietala .
ExxonMobil added that the outcome was not yet determined for all four director candidates Engine No. 1 did not want to be re-elected. As for the other two candidates from the activist firm, the outcome for Alexander Karsner was also undetermined while Engine No. 1’s fourth candidate Anders Runevad was not elected even though he was responsible for generating a 480 per cent return for shareholders as the CEO of Vestas Wind Systems.
It is yet to be seen who will take on the two final seats. The current board has 12 directors, 11 of which non-executive.
This was quite a feat by Engine No. 1 as it is not a major shareholder in the company and holds a tiny 0.02 per cent share in the company. How things stand now, the company will have two seats on the board of ExxonMobil.
But there is always a catch. According to Reuters , three board members nominated by the activist firm were supported by BlackRock, ExxonMobil’s second-largest shareholder. BlackRock is the world’s largest fund manager and has a 6.7 per cent stake in ExxonMobil.
ExxonMobil CEO Darren Woods said: “ We welcome all of our new directors and look forward to working with them constructively and collectively on behalf of all shareholders .
“ 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 ”.
In its statement, ExxonMobil said that it had developed a portfolio of investment opportunities in high-return, low cost-of-supply projects and that it also significantly reduced emissions and has set clear plans for further reductions to 2025, consistent with the goals of the Paris Agreement.
ExxonMobil is not the only supermajor under pressure from activist firms to shed its directors or even CEOs. Earlier this month, Majority Action called on stakeholders of Chevron to oust CEO Michael K. Wirth and lead director Ronald D. Sugar was due to the company’s failure to set net-zero targets and align its capital investments with limiting warming to 1.5°C.
Majority Action most specifically addressed major asset managers like BlackRock and Vanguard, who hold outsized voting power at most S&P 500 companies.
Calling on the two asset management companies has become somewhat of a trend. Majority Action also asked for support from BlackRock and Vanguard to remove Duke Energy CEO Lynn Good and lead independent director Michael G. Browning .
Other initiatives include removals of Valero Energy’s Joseph W. Gorder and Robert A. Profusek , GoldmanSachs’ David M. Solomon and Adebayo O. Ogunlesi , as well as Berkshire Hathaway’s Warren E. Buffett .