A proxy fight to the energy supermajor ExxonMobil it is destined to reach its climax on Wednesday, when shareholders will vote on the direction and strategy of the company which will also be a verdict on the future of the oil industry.
The poll follows months of pressure from Engine No. 1, an upstart activist hedge fund that wants the largest U.S. oil producer to cut capital expenditures and find a new plan that it said would focus “on accelerating rather.” than to delay the energy transition ”to cleaner energy.
The hedge fund has launched its activist countryside in December, appointing four new individuals for election to the company’s board of directors.
“This could be an important moment for the investment and oil industry,” said Edward Mason, director of engagement in Generation Investment Management. “If the candidates for Engine No. 1 are elected, the responsible investment will really show their muscle and the importation of the investor’s net worth will be clear.”
U proxy battle it has been expensive, with Exxon saying it will spend at least $ 35 million on stock requests and the No. 1 engine expects $ 30 million. The company also contacted some small shareholders in an offer for support.
Crucial to the result will be the votes of Exxon’s largest investors: fund managers Vanguard, BlackRock and State Street, which hold more than a fifth of the company’s shares.
Pension systems Calpers, Calstrs and the New York State Commonwealth Retirement Fund as well as the European Legal Assets Manager and General Investment Manager said they will vote for the No. 1 Slate Engine Wednesday. The two largest in America proxy advisors this month it approved some of the candidates for the hedge fund council.
The No. 1 engine itself holds a stake worth just $ 54 million in a $ 247 billion company that less than a decade ago was the world’s largest by market capitalization.
Years of Heavy spending is rising debt have disappointed some Exxon shareholders, even though the company retained its dividend last year despite the loss of more than $ 20 billion that the pandemic and the collapse of oil prices have devastated its business.
Engine # 1 says Exxon’s focus on oil and gas exposes it “Existential” risk while competitors prepare for a low-carbon world.
Exxon has already appointed new directors – and has announced more to come – has cut planned spending, started reporting emissions from its products and announced new low-carbon projects.
“This could be the most important shareholder vote in Exxon’s history,” said Paul Sankey, oil analyst at Sankey Research.
Darren Woods, executive director, dismissed a tough pivot to clean up energy and told the Financial Times last week that Exxon “will face a low-carbon future and the challenges associated with it” while “providing the products that society needs.” he needs it. ”
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