Exxon planning board, faces a proxy fight with activist investors

Exxon Mobil Corp. is planning to make improvements to the board and take more steps to decrease its carbon footprint.

On Wednesday, Engine No. 1, an investment company based in San Francisco nominated four candidates to join the board of directors of Exxon. Gregory Goff, Kaisa Hietala, Alexander Karsner, and Anders Runevad, the four independent candidates for director, all have oil and gas and renewable energy expertise.

The decision by the company to appoint four new directors to the board of Exxon effectively begins its proxy battle to wrest control over the future of the company.

“Investors increasingly want to see companies focused on the long-term and ExxonMobil is no exception,” said Engine No.1 in the statement, “We believe that ExxonMobil’s Board needs new members who have proven success positioning energy companies for today as well as tomorrow, and who are sufficiently independent of the current Board to ensure a clean break from a strategy and mindset that have led to years of value destruction and poorly positioned the Company for the future.” 

As of 9:40 a.m. in New York, the stock dropped 1.9 percent to $45.02. So far this year, the stock is up 9.3 percent.

Engine No. 1 has called for Exxon to refresh the management, revise executive pay, and engage in renewable resources and more profitable exploration. In a letter to the company's board in December, the company said improvements were required to help Exxon escape the fate of other once-iconic American businesses and to better prepare itself for long-term, profitable growth.

Another Exxon investor, D.E. Shaw & Co., also suggested Exxon for strengthening its environmental image by taking steps such as setting and implementing transparent and achievable pollution goals into its long-term incentive strategies.

Since mid-December, ExxonMobil has partnered with Engine No. 1. Meanwhile, the company's board affairs committee following the by-laws of the corporation will review Engine No 1’s notice of nomination and nominees.

In the coming weeks, ExxonMobil will continue to update shareholders on the company's plan to create long-term, positive shareholder value. It will also include reports on business success and climate change action, including technological commercialization programs that are critical to lowering emissions and achieving social targets that are aligned with the Paris Agreement.