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shareholders may shake up the company’s board at their annual meeting on May 26.
Proxy advisor Institutional Shareholder Services backed three of the four board candidates submitted by Engine No. 1, saying the activist investor made a “compelling case” that change was needed on Exxon Mobil’s (ticker: XOM) board.
Exxon told Barron’s it was reviewing the
recommendation. In an interview with CNBC, chief executive
Darren Woods
said the company disagrees with ISS.
“We feel very strongly that we have the board in place to help manage this company not only drive success in today’ environment but position the company for longer term success as the industry transitions,” Woods said.
Shares were up 2.2% in Friday trading while the S&P 500 gained 1.1%.
Engine No. 1 launched its campaign late last year with the backing of the California State Teachers’ Retirement System, or Calstrs. The firm critiqued Exxon for its poor capital allocation strategy and failure to prepare for a decarbonizing world. Exxon countered that Engine No. 1’s nominees lacked experience in companies of its size; the oil and gas producer is one of the largest publicly traded companies in the world.
ISS, however, found that Engine No. 1’s nominees could be valuable to the company as it navigates the energy transition. It recommended
Gregory Goff,
executive vice chairman of Marathon Petroleum (MPC); Kaisa Hietala, co-owner of Gaia Group Oy, a sustainable business consulting firm; and Alexander Karsner, senior strategist at X, the innovation lab of Alphabet (GOOGL).
Engine No. 1 said in a statement that it was “pleased” ISS recognized the need for new board members.
“ISS’ recommendation is further validation of our belief that addressing the fundamental issues at Exxon Mobil requires a Board that includes individuals with relevant energy industry experience and skills,” Engine No. 1 said.
Over the past few months, Engine No. 1 has gotten increasing support from Exxon shareholders. In addition to Calstrs, the California Public Employees’ Retirement System (Calpers), the New York State Common Retirement Fund, and the Church of England have all backed the activist.
Write to Carleton English at carleton.english@dowjones.com
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