Activist Engine No. 1 wins third seat on Exxon board

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ExxonMobil shareholders elected a third director nominated by hedge fund Engine No. 1 to the oil company’s board, the company said on Wednesday, extending the new firm’s upset victory at one of America’s most iconic corporations.

The election was a shock to an energy industry struggling to address growing investor concerns about global warming and a warning to Exxon managers that years of weak returns were no longer acceptable.

Engine No. 1 nominee Alexander Karsner, a strategist at Google owner Alphabet, won the fund’s third seat, according to a regulatory filing. Exxon board member and former Caterpillar CEO Douglas Oberhelman also was elected, the company said.

“We look forward to working with all of our directors to build on the progress we’ve made to grow long-term shareholder value and succeed in a lower-carbon future,” said Exxon Chief Executive Darren Woods in a statement.

Woods, who campaigned against the challenger, was re-elected by 94.1 percent, a larger margin than a year ago. A non-binding shareholder proposal asking the company to split the CEO and chairman’s roles was supported by 22.1 percent compared to 32.7 percent last year, according to the preliminary numbers.

ExxonMobil CEO Darren Woods stands at a microphone during a fundraising gala in Washington DC in 2019.
ExxonMobil CEO Darren Woods had campaigned against the slate backed by hedge fund Engine No. 1.
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Existing directors Steven Kandarian, Samuel Palmisano and Wan Zulkiflee will exit the 12-person board, the filing said. Former IBM CEO Palmisano was the board’s longest serving director with 15 years.

The tallies remain preliminary as the counting continues a week after Exxon’s annual meeting, where the company delayed proceedings by taking a recess, a move criticized by Engine No. 1 as a pretext to continue to solicit votes.

“We hope the existing board directors will work with the new non-executive directors and benefit from their significant experience with transition plans and in renewable energy,” said Bess Joffe, at the Church Commissioners for England, which invests for the Church of England.

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