Dissatisfied shareholder to challenge ExxonMobil for board seats

Jan 28, 2021 News

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– Deeply concerned about company’s carbon emissions

Kaieteur News – Engine No. One, a new investment firm, that seeks to enhance long-term value through active ownership, announced yesterday that it has formally nominated four highly qualified, independent director candidates with diverse track records of success across the energy sector to the ExxonMobil Corporation’s Board of Directors. This is expected to be heard at ExxonMobil’s upcoming Annual Meeting of Shareholders.
Engine One’s challenge for board seats is rooted in its dissatisfaction with ExxonMobil’s emissions output. According to Bloomberg, the oil giant’s annual emissions from its operations are set to increase from 122 million metric tons in 2017 to 143 million metric tons in 2025. The investment firm is also concerned about the company’s decisions, which have led to its declining fiscal health.
In a statement to industry stakeholders, Engine No. 1 stated, “Investors increasingly want to see companies focused on the long-term and ExxonMobil is no exception. 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 from 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.”
While ExxonMobil has recently taken incremental steps to improve its performance in the face of financial and shareholder pressure, Engine One said it is of the firm belief that a reactive short-term approach is no substitute for a proactive long-term strategy that addresses the threats and opportunities facing the company in a changing world. Taking this into consideration, among other factors mentioned earlier, the new investment firm is proposing four independent nominees – each of whom it believes, brings a differentiated skill set that makes them uniquely suited to help the Board chart a new value-creating path, including better long-term capital discipline, strategic planning, and management incentives.
The nominees being proposed by Engine One are Gregory J. Goff, Kaisa Hietala, Alexander Karsner, and Anders Runevad.
This newspaper understands that Goff has a long track record of success in the energy industry. He served as the CEO of Andeavor (ANDV), a leading petroleum refining and marketing company formerly known as Tesoro, for eight years ending in 2018. He was named one of the “Best-Performing CEOs in the World” by Harvard Business Review in 2018.
With regard to Ms. Hietala, Engine One was keen to note that she is an experienced leader in strategic transformation in the energy sector who began her career in oil and gas exploration and crude oil trading. She played a central role in the strategic transformation of Neste into the world’s largest and most profitable producer of renewable diesel and jet fuel, which was named by Harvard Business Review as one of the “Top 20 Business Transformations of the Last Decade” in 2019.
Mr. Karsner is also an accomplished energy industry entrepreneur and policymaker with more than three decades of global conventional and renewable energy experience. According to Engine One, he began his career developing and financing large-scale energy infrastructure, and as a private equity investor, venture partner, and advisor, his portfolios have included some of the most successful clean-tech startups of the past decade.
As for Mr. Runevad, Kaieteur News understands that he is a successful business leader with global energy experience and was a signatory of the United Nations Paris Climate Agreement. He served as the CEO of Vestas Wind Systems, a wind turbine manufacturing, installation, and servicing company with more installed wind power worldwide than any other manufacturer, for six years ending in 2019, and is credited with turning around the company. He had appeared on Fortune’s “Businessperson of the Year” list in 2016 and was named one of the “Best-Performing CEOs in the World” by Harvard Business Review in 2016, 2017, and 2019.
Since learning of Engine One’s intention to grab four Board seats, ExxonMobil responded yesterday stating that the notice of nomination would be evaluated in line with the corporation’s by-laws.
ExxonMobil said too that it will continue to update shareholders in the coming weeks on the company’s strategy to build long-term, sustainable value for shareholders. This newspaper understands that it will also provide updates on company performance and actions to address climate change, including initiatives to commercialize technologies, which are key to reducing emissions and meeting societal goals consistent with the Paris Agreement.

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