Investors, activists calling for the dangers of climate change to win a dramatic proxy battle with ExxonMobil this week, said the greats will have to cut oil production, indicating they It continues to pressure management to change its strategy in response to shareholder votes.
“They need to position themselves for success,” said Charlie Penner, head of the Anti-Company No. 1 hedge fund. “You would definitely believe that would mean oil production. and less gas in the future.”
Engine No. 1, named after a fire in San Francisco. It launched a heroic effort in December. It nominated four directors to Exxon̵7;s board and warned of the “real risks” posed by its commitment to fossil fuels.
The chutzpah show pits the hedge fund, which was founded last year, against the world’s most famous oil company. with enormous geopolitical goals and financial influence
One of Wall Street’s most expensive proxy battles ended in an unusual annual meeting on Wednesday, when Exxon tried to do what critics described as the company’s version of the Senate opposition. This delayed the closing of the ballot while there was an hour-long break before Chief Executive Darren Woods took office. Company strategy questions
It is the first time Exxon has dealt with a controversial shareholder vote of this nature.
Chris James, founder of Engine No 1, said, “Like many As we have seen in this campaign The way they run meetings is under well-known companies,” Engine No 1 founder Chris James said in an interview with the Financial Times.
“Looking at yesterday’s meeting is a perfect example of how they didn’t realize the world had changed. It was all displayed.”
Ultimately, Exxon announced that shareholders had selected two Engine No 1 nominees after preliminary vote counting. The fund is expected to make a third announcement when the official votes are counted, likely in the middle of next week.
Engine No. 1 will closely monitor the behavior of executives. said Penner. Some analysts have suggested that Exxon’s management could ignore the fund’s new directors.
“I wouldn’t recommend it,” he said.
Exxon’s two biggest shareholders, BlackRock and Vanguard, both backed some directors nominated by Engine No 1, blaming the company’s executives that environmental campaigners say heralds an era. New to Wall Street’s approach to climate risk.
But engine No. 1 is as clear as its campaign on Exxon’s underdeveloped financial performance in recent years. with the weather
“Exxon thinks this is an ideology,” James said, but engine number 1 is “capitalism. It’s not a non-profit organization,” he added. “Our idea is that this will have a positive effect on the share price.”
The hedge fund is not calling for Exxon to replicate the moves in renewables that BP operates.
“BP spent billions of dollars to buy half of the wind farms Equinor developed. That is not a great business model and it is punished by the market,” Penner said of the latest deal by the United oil giant. Empire vs. Norwegian Company
Penner says Engine No 1 will give Exxon time to develop a new strategy. But when the world moves to reduce carbon emissions The change will still be profound. The faster-than-expected energy shift undermines Exxon’s assumptions about long-term oil demand, Penner said.
“What we’re saying is: Plan for a world where maybe the world doesn’t need you. [oil] barrels,” he said.
It would be a sharp departure for a company that currently produces oil and gas equivalent to nearly 4 million barrels per day. or more than 4 percent of the world’s total and has made long-term plans for new large-scale crude oil projects in United States and off the coast of Guyana
Exxon said “Welcome new directors” and will “share our plans in detail with them and listen to their views”.
The success of the No. 1 engine has led to claims that a new era of shareholder mobility may have begun. The fund holds just $50 million in the $250 billion company, which, less than a decade ago, was the world’s largest fund by market capitalization. Another company is in sight.
“Our ambitions are clearly broader than Exxon,” James said.
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