{"id":115229,"date":"2021-05-27T20:03:16","date_gmt":"2021-05-27T20:03:16","guid":{"rendered":"https:\/\/fin2me.com\/?p=115229"},"modified":"2021-05-27T20:03:16","modified_gmt":"2021-05-27T20:03:16","slug":"exxon-scrambles-to-stave-off-dissidents-recesses-shareholder-meeting","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/exxon-scrambles-to-stave-off-dissidents-recesses-shareholder-meeting\/","title":{"rendered":"Exxon scrambles to stave off dissidents, recesses shareholder meeting"},"content":{"rendered":"
(Reuters) – Exxon\u2019s business strategy hung in the balance on Wednesday as it took the uncommon step of recessing its shareholder meeting as it scrambled to stave off a challenge from investors aiming to reshape its board to better align the oil giant with global moves to combat climate change.<\/p> A dissident shareholder group led by tiny fund Engine No. 1 sought to replace as many as a third of Exxon Mobil Corp\u2019s 12-member board of directors at the shareholder meeting, the first major boardroom contest at an oil major that makes climate change the central issue.<\/p>\n In an unusual move, at about 11:15 a.m. EDT (1515 GMT) Exxon adjourned the meeting for one hour as it continued to count votes, which critics called a delay tactic.<\/p>\n Engine No. 1 blasted Exxon in a statement, accusing it of delaying the vote-counting to avoid an embarrassing loss in the proxy battle using its \u201ccorporate machinery.\u201d<\/p>\n \u201cShareholders should not be fooled by ExxonMobil\u2019s last-ditch attempt to stave off much-needed board change in response to significant shareholder pressure and the prospect of losing a proxy contest,\u201d Engine No. 1 said in a statement. \u201cExxonMobil should accept the result, take the vote and move forward.\u201d<\/p>\n \u201cCompanies often do this when they see they don\u2019t have the votes for something, they\u2019ll adjourn and see if they can get the votes to come in,\u201d said Francis Byrd, an independent corporate governance consultant.<\/p>\n Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on investments to boost its output – in contrast to global rivals that have scaled back fossil fuel investments.<\/p>\n Investors led by Engine No. 1 have said the world is changing quickly as governments and companies move to reduce the emissions from fossil fuels that are warming the planet, and that Exxon Chief Executive Darren Woods needs to make big changes to ensure the company\u2019s future value to investors.<\/p>\n Engine No. 1, which has put up a slate of four nominees, has successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. It has just a $50 million stake in Exxon, which carries a market value of nearly $250 billion.<\/p>\n Preliminary vote results are expected by midday. Results will show if there is broad support among energy investors for a transition to cleaner fuels necessary to limit worldwide temperature increases.<\/p>\n Charles Elson, professor of corporate governance at the University of Delaware, said meeting suspensions are allowed and it shows the vote is close. \u201cIt has happened before. Is it a regular in an annual meeting? No,\u201d Elson said.<\/p>\n BlackRock Inc, Exxon\u2019s second-largest shareholder, joined the dissidents, as it will support three of Engine No. 1\u2019s nominees, Reuters reported on Tuesday.<\/p>\n Exxon has fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists have said it is too little, too late, and that Exxon needs a less reactive strategy.<\/p>\n \u2018BROAD CHANGE\u2019<\/p>\n \u201cThis proxy fight reflects this broad change in how our political leaders, our business leaders and our fellow shareholders are stepping up and taking these immense risks seriously,\u201d New York State Comptroller Thomas DiNapoli said.<\/p>\n The state\u2019s pension fund in April said it backed Engine No. 1\u2019s slate.<\/p>\n \u201cMy bet is activists win a couple of seats and it is short-term negative ExxonMobil,\u201d independent oil analyst Paul Sankey said in a Wednesday note.<\/p>\n On Monday, Exxon said it would add two new directors to its board, one with climate industry experience, in an attempt to win enough institutional support.<\/p>\n Exxon added three new directors to its board earlier in the year as the pressure from Engine No. 1 and hedge fund D.E. Shaw, which voiced similar complaints, mounted. D.E. Shaw kept its dealings with Exxon largely out of the limelight.<\/p>\n \u201cWe have one of the strongest boards in corporate America,\u201d Woods said in an interview last week.<\/p>\n Exxon\u2019s board understands the company\u2019s complexity and supports a path toward carbon reductions in the Paris accord, Woods said, referring to the international agreement aimed at combating climate change.<\/p>\n Exxon shares were up 0.3% in Wednesday trading. The stock has lagged its peers over the last five years.<\/p>\n There will be no need for new oil and gas projects if investors want net-zero carbon emissions by 2050, the International Energy Agency said this month.<\/p>\n Wednesday’s vote “is a good example of activist stewardship to help the company get the board it needs for the energy transition,” said Robert Eccles, a professor at Sa\u00efd Business School at the University of Oxford. (Graphic: Exxon returns lag global peers, )<\/p>\n