Exxon Mobil Board Fight Enters Final Rounds - Barron's

Activist investor Engine No. 1 wants to get four seats on the board of energy... — Activist investor Engine No. 1 wants to get four seats on the board of energy giant Exxon, and it has the backing of big pensions.
Scott Olson/Getty Images

The battle over the composition of Exxon Mobil’s board revved up as the company’s May 26 shareholder meeting approached.

Activist Engine No. 1 dropped an 81-page presentation on Monday that claimed that Exxon Mobil (ticker: XOM) has had an “undisciplined capital-allocation strategy” causing underperformance. The next day, Exxon offered a rebuttal in 84 pages, insisting that it had the “right strategy.”

Engine No. 1 initiated its campaign late last year with the backing of the California State Teachers’ Retirement System, or CalSTRS. The newly launched investment firm wants to add four members to Exxon’s 13-member board to curb spending on low-return projects, and accumulating debt. Engine No. 1 also wants Exxon to position itself better for a decarbonizing world.

Exxon critiqued Engine No. 1’s director candidates, acknowledging their skills while decrying their lack of experience in companies with the size and scale of the oil and gas giant. The company, not surprisingly, favors directors now on the board.

Editor's Choice

“We’ve got a really experienced board with a lot of complementary skills,” said Exxon Chairman and CEO Darren Woods on a call with analysts on Friday after releasing its strong first-quarter report.

Despite that, there are signs that other big investors may be looking to align with the activists. In addition to Calstrs, the California Public Employees’ Retirement System and the New York State Common Retirement Fund also plan to vote with Engine No. 1. The three big public pension funds are among Exxon’s top 50 investors, according to S&P Capital IQ.

Write to Carleton English at carleton.english@dowjones.com

Let's block ads! (Why?)