If you
thought the beef between Brooks and Bryson was spicy, you should check
out the boardroom blowout at ExxonMobil. Following a vote at the
company’s shareholder meeting yesterday, the activist investment firm
Engine No. 1 won at least two of the four board seats it was aiming for. This could mean monumental changes for the US’ largest oil producer.
The backstory: In December, Engine No. 1, then a brand new hedge fund, bought ~$40 million
of Exxon shares—just 0.02% of the company—and sent a letter to the
board with a simple request: Invest in clean energy, or else. The firm
wants CEO Darren Woods to commit to bringing Exxon’s carbon emissions to
zero by 2050.
Woods’s response: No.
He thinks the company’s more incremental steps to address climate
concerns, such as investing billions into carbon-capture tech, are
sufficient.
What
followed was a fight in which both sides spent a combined $65 million
convincing shareholders to vote for their preferred board members.
How can an investor with only 0.02% have that much power?
Like Glacier
Freeze Gatorade, Exxon’s financial performance ain’t what it used to
be. Former CEO Rex Tillerson and now Woods presided over a “decade of
value destruction,” Engine No. 1 claimed, rallying some bigger
shareholders to its side.
Then, the pandemic obliterated oil demand, and Exxon posted a $22 billion loss
last year, its first ever annual loss as a public company. After almost
a century in the Dow Jones Industrial Average, Exxon was booted from
the index in August (though its share price has rebounded ~47% in the
past six months).
As if there weren’t enough emojis in the Big Oil group chat yesterday, Shell was hit with a historic L of its own. A Dutch court ordered the oil giant to cut emissions 45% from 2019 levels by 2030, more than double what it originally projected.
What we learned yesterday: If oil companies refuse to make a green transition on their own, outside interests will make sure they do.
|
No comments:
Post a Comment