Exxon welcomes a third activist-elected director to its board

US supermajor ExxonMobil overnight conceded that three board members nominated by climate activist group Engine No.1 will be appointed to its board of directors after last week’s AGM upset.
Exxon welcomes a third activist-elected director to its board Exxon welcomes a third activist-elected director to its board Exxon welcomes a third activist-elected director to its board Exxon welcomes a third activist-elected director to its board Exxon welcomes a third activist-elected director to its board

Mark Tilly

Journalist

Mark Tilly

The hedge fund, which only has a 0.02% stake in Exxon successfully nominating three outsider directors to its board. 

The fund seized upon shareholder discontent over the company's poor financial track record, lack of concrete steps to curb its emissions and lack of energy transition experience on its board.

Exxon confirmed in a Securities and Exchange Commission filing that former Energy Department official Alexander Karsner had won a majority of votes from shareholders. 

Karsner placed 11th in a race for 12 board seats, about 1.2% ahead of two of ExxonMobil's nominees.

Before entering public service, Karsner headed up Enercorp, a wind power development firm and international agent of Vestas and was a former director and senior development manager for Wartsila Power Development. He was also an assistant energy secretary in the George W. Bush administration. 

Last week the company noted Engine No.1's two other nominees, longtime oil refining executive Gergory Goff and Finnish biofuel executive Kaisa Hietala had been elected, while the fourth nominee, former Vestas executive Anders Runevad fell short. 

The three directors will be the minority on a 12-strong board, however commentators are seeing it as an opportunity to shake things up at the global company. 

The motion had strong support from a series of proxies and is seen as a large setback for CEO Darren Woods, given Exxon's chief executive is usually the one to appoint board members. 

However overnight he said the company "looked forward to working with all our directors to build on the progress we've made to grow long-term shareholder value and succeed in a lower-carbon future". 

California state pension fund managing investment director Anne Simpson told The Washington Post that shareholders had given the board a clear message to the board calling for accountability. 

"We need climate competent directors willing and able to drive the energy transition," she said.  

"The votes at Exxon mark a new era in financial markets, with investors behaving like owners."