(Bloomberg) – It was a remarkable moment for Exxon Mobil Corp. and the wider corporate world: a small activist fund successfully transformed its board of directors.
But in the hours leading up to this week’s annual shareholder meeting, Exxon made a special effort to eliminate the threat of a massive layoff campaign months ago.
Exxon calls investors on the morning of the vote – and even during an hour-long non-scheduled pause during a virtual meeting – asking them to reconsider the vote, based on the data of the people. Answer multiple phone calls Some said they found the last contact and stopped the unorthodox meeting and was troubling.
“It’s a very unusual annual general meeting,”; said Eishamastagne, fund manager of the California Teachers Retirement System, a major Exxon investor who has been supporting the event campaign from the start. I don’t feel good as an investor. “
The May 26 meeting concluded with Exxon said it had elected two of the four directors’ nominees for the No. 1 coup, a little-known investment firm called. Calls for companies to overhaul their strategies, reduce costs and make plans. To address the problem of climate change Its victory is widely viewed as a reminder to the rest of the industry that investors will now grab energy companies to account for environmental concerns.
The results of the vote have not been disclosed yet. The third No. 1 engine title contender remains in the race to fill one of the two remaining board seats. There was no suggestion, though, that Exxon breached any of the rules during Wednesday’s meeting. But that strategy is unusual for blue chip companies.
In response to questions about the meeting, the company said it was “actively involved” with investors and welcomed newly elected directors.
Exxon objected to engine No. 1 from the outset. The fund holds just 0.02 percent of Exxon’s equity, valued at approximately $ 54 million.The oil company explained that the fund’s four applicants were ineligible and said the fund’s proposal would not affect Exxon’s dividend payout.
Still, the company awarded another investor DE Shaw & Co. in March, appointing two new directors, including activist investor Jeff Ubben. But Exxon still declined to meet with No. 1 applicants.
The main hurdle the company faces is gaining support from large institutions, including the top three investors, Vanguard Group Inc., BlackRock Inc. and State Street Corp., which together hold more than 21 percent of BlackRock’s stake. About voting guidelines on climate change
Many of the talks with big investors in the vote largely focused on Exxon’s strategy of reducing emissions to zero by 2050, not the company’s financial performance, according to people familiar with. The talk Chief Executive Darren Woods went down the trenches during the proxy fight and pledged to keep the response going after the meeting.
But Vanguard, BlackRock, and State Street eventually supported some of the nominees from the Engine No. 1.
Any indication the battle could be in favor of Engine No. 1 in mid-May, with some support from two top proxy advisory firms. Two days before the vote, Exxon said it would appoint two new directors, one with “climate experience” and the other with industry expertise.
On the morning of the meeting, Engine No. 1 released a statement notifying shareholders that Exxon may attempt “in a targeted manner” to persuade a change in voting.
Of course, when the virtual conference kicks off at 9:30 AM, Dallas representatives, Exxon’s representatives summoned investors. In some cases, those calls made dissatisfied holders at least reduce their support to one or two dissident nominees instead of all four, according to people familiar with the conversation. Which requests to remain anonymous because the conversation is private
At about 10:15 a.m. Stephen Littleton, Chief Investor Relations announced that the operation would be paused for 60 minutes, claiming that voting was still in place while classical music played on. Email webcasts start flying baffled between investors by disruption.
One executive of Exxon’s major shareholders said they were contacted during the vacancy and pushed for a voting change. A person with decades of experience handling conference room elections said that although an appeal a day before the vote was common, But it was the first time they filed such a complaint during a meeting.
Meanwhile, Engine No. 1 released another statement stating that shareholders should not be deceived by ExxonMobil’s last attempt to hinder a much-needed board change, ”said Charlie Penner, head of engagement at ExxonMobil. Engine No. 1 issued a television program to complain.
“They are using a tactic called Voting where they tell the shareholders to vote for this person. They tell other shareholders that they are going to vote for this person and they are going to vote for this person. The legs are slowly trying to lower people, “he told CNBC.
The pause is something that Anne Simpson – the investment director of the California Public Employee Retirement System for the Governance and Sustainability of the Board – has never seen before in a third career. Her decade
Simpson did not receive a call from Exxon about the change in her vote. But the practice still bothered her. “If that opinion is true, it raises questions about the sanctity of ballot boxes and whether companies should be privileged or not,” she said.
The meeting was not concluded until nearly three hours after it first started, with Littleton reading a summary of the preliminary vote count.
“We welcome new directors Gregory Goff and Kaisa Hietala to join the board,” Woods said in his closing remarks, “and look forward to working with them constructively and together on behalf of all shareholders.”
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