ExxonMobil shareholders hand board seats to activist nominees

ExxonMobil’s shareholders on Wednesday voted to change the supermajor’s board, delivering a historic rebuke to management, as changes sweeping though the global oil sector reached the top of its most famous company.

A majority of shareholders selected at least two of the four directors nominated by Engine No 1, a hedge fund that has waged a proxy campaign since December, saying the oil and gas group’s focus on fossil fuels had put it at “existential risk”.

The activist victory marked a huge breakthrough in campaigners’ efforts to put the climate crisis at the centre of American capitalism and the global oil business, said supporters.

“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.

Exxon revealed the vote during its annual general meeting, which included an unusual hour-long intermission and lengthy question and answer session with Darren Woods, chair and chief executive.

The results added to a bruising day for the business of Big Oil. A court in the Netherlands told Royal Dutch Shell to aggressively cut its emissions, while shareholders in Chevron, the US’s second-biggest oil company after Exxon, convincingly voted for a resolution calling on the company to cut pollution from the products its sells.

The Exxon vote followed months of pressure from Engine No 1, which had urged the company cut capital spending and focus “on accelerating rather than deferring the energy transition” to cleaner energy.

The hedge fund holds a stake worth just $54m in a company with $248bn in market capitalisation. Exxon’s shares rose 0.7 per cent to $58.64 after the votes were tallied Wednesday.

The proxy battle was expensive, with Exxon saying it would spend at least $35m on shareholder solicitations and Engine No 1 expecting $30m. The company has even contacted some small shareholders in an attempt to galvanise opposition to the hedge fund.

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