Engine No. 1 extends gains with a third seat on Exxon board

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Exxon Mobil Corp shareholders elected a 3rd director nominated by hedge fund Engine No. 1 to the oil firm’s board, the corporate stated on Wednesday, extending the agency’s upset victory at one among America’s prime vitality firms.

The election was a shock to an vitality trade struggling to deal with rising investor issues about international warming and a warning to Exxon managers that years of weak returns had been now not acceptable.

Engine No. 1 nominee Alexander Karsner, a strategist at Google proprietor Alphabet Inc, gained the fund’s third seat out of its 12-member board, in keeping with a regulatory submitting. Exxon board member and former Caterpillar CEO Douglas Oberhelman additionally was elected, the corporate stated.

“We stay up for working with all of our administrators to construct on the progress we’ve made to develop long-term shareholder worth and reach a lower-carbon future,” stated Exxon Chief Government Darren Woods in a press release. He was unavailable for additional remark.

The activist marketing campaign’s success is a part of a “tidal wave” of investor issues on environmental, social and company governance (ESG) points, stated Exxon Director Ursula Burns, who spoke Wednesday night at a Federal Reserve Financial institution of Dallas digital occasion.

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The corporate’s response to environmental criticisms “has not been effectively completed,” Burns stated, including: “that’s one of many factor we’ve got to work on,” noting its investments in carbon seize and storage applied sciences. Burns was one of many administrators who secured a seat final week.

Woods, who campaigned towards the challenger, was re-elected by 94.1%, a bigger margin than a yr in the past. A non-binding shareholder proposal asking the corporate to separate the CEO and chairman’s roles was supported by 22.1% in comparison with 32.7% final yr, in keeping with preliminary numbers launched on Wednesday.

Administrators Steven Kandarian, Samuel Palmisano and Wan Zulkiflee will exit the 12-person board, the submitting stated. Former Malaysian state oil firm chief Zulkiflee was appointed in February after Exxon acquired blunt criticism its administrators lacked vitality expertise. Former IBM CEO Palmisano was the board’s longest serving director with 15 years.

Engine No. 1 nominees Kaisa Hietala, a former govt at End refiner Neste Oyj, and Gregory Goff, a former prime govt at Marathon Petroleum and Andeavor, had been the ninth and tenth largest vote recipients, respectively.

“We hope the prevailing board administrators will work with the brand new non-executive administrators and profit from their important expertise with transition plans and in renewable vitality,” stated Bess Joffe, on the Church Commissioners for England, which invests for the Church of England.

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The tallies stay preliminary because the counting continues every week after Exxon’s annual assembly, the place the corporate delayed proceedings by taking a recess, a transfer criticized by Engine No. 1 as a pretext to proceed to solicit votes.

“People who find themselves anticipating substantive adjustments quickly at (Exxon) will possible be sorely dissatisfied,” stated Mark Stoeckle, senior portfolio supervisor at Adams Funds. “Repositioning XOM from an organization centered on oil to 1 centered on local weather change points will take a protracted, very long time.”

(Reporting by Ankit Ajmera in Bengaluru, Svea Herbst-Bayliss and Jennifer Hiller; Modifying by Anil D’Silva and Aurora Ellis)