In Exxon’s annual Shareholders meeting on Wednesday, activist investment fund Engine No. 1 emerged victoriously. After a bloody battle over Exxon’s board of directors, Engine No. 1, despite its small size, successfully won at least two board seats at the oil giant. The vote for a third candidate backed by Engine No. 1 is now uncertain, as it is too close to call. In its fourth candidate, Engine No. 1 was unsuccessful.
Exxon is only worth $54 million to Engine No. 1. On the other hand, Exxon was able to have eight of its nominees elected to the board. There are twelve places available. The victory is being hailed as a stunning and powerful signal by Shareholders about their dissatisfaction with the oil giant for failing to do more to reduce its impact on the environment. And that could portend significant changes for Exxon.
Engine No. 1 nominated and endorsed four candidates and was successful in enlisting the backing of other significant pension funds. Engine No. 1 has proposed directors with experience in energy industry transformation, who would include climate change concerns in a long-term business plan rather than as “simply talking points.” Exxon’s “talking points” include investing $3 billion in carbon capture research and emissions-reduction technology, as well as appointing an ESG investor to its board of directors in March.
This appears to have been insufficient for Shareholders, as seen by today’s vote. Before Wednesday’s vote, some observers predicted that Exxon CEO Darren Woods would be unable to keep his job if any of Engine No. 1’s nominees successfully gained a seat on the oil giant’s board of directors.