BlackRock, Exxon Mobil Corp’s second largest shareholder is supporting some of upstart hedge funds Engine No.1’s contenders to join the company’s board, in a hit to the energy giant, as indicated by individuals acquainted with the matter.
With the annual shareholders meeting Wednesday, Exxon has been scrambling to win the support of major institutional shareholders for its directors in its hardest board room fight in recent history. Exxon has confronted mounting criticism for its hesitance to put more in sustainable energy and for some time has been delivering weak financial performance.
BlackRock the world’s biggest fund managers, has a 6.7% stake in Exxon, and its vote delineates how baffled investors have become after years of having the organization excuse worries about its methodology. Investors have developed more genuine concerns about battling environmental change.
BlackRock didn’t react to a request for input.
Exxon declined remark until after ballot results are revealed on Wednesday. Different sources have revealed that the top U.S. oil maker has been calling shareholders, including Vanguard and State Street, to gather support for its 12 directors. Primer outcomes will probably be declared Wednesday morning after the meeting starts at 10:30 a.m. EDT.
Engine No. 1 has a stake worth just about $50 million in Exxon, an organization with a market capitalization of about $250 billion, yet the hedge funds has pushed freely for Exxon to move quicker to diminish its carbon impression. The footing it has acquired with shareholder advisory firms and BlackRock highlights the significance investors are providing for environmental, social and corporate governance (ESG) factors.
The sources mentioned secrecy on the grounds that BlackRock doesn’t openly uncover how it makes its choice early.
The deciding vote could be determined by Exxon’s three biggest shareholders – Vanguard, State Street and BlackRock. Vanguard claims about 8.2% of the Exxon’s stock while State Street possesses 5.7%. Vanguard won’t uncover its choice before the meeting, a representative said on Tuesday.
BlackRock has been more willing than Vanguard and State Street to back dissenter shareholders, analysts have said. Its choice could provide the opportunity to getting at least one seat for Engine No. 1’s candidates.
Engine No. 1 proposed four directors – Gregory Goff, Kaisa Hietala, Alexander Karsner and Anders Runevad – with mastery in energy, technology and regulatory policy. BlackRock upheld everything except Runevad, individuals said. Exxon has said the four don’t have the skill required for its board.
BlackRock likewise expressed a desire for peace to the board and decided in favor of CEO Darren Woods and for lead independent director Kenneth Frazier. A year ago BlackRock casted a ballot to separate the Chairman and CEO roles that Woods holds and casted a ballot against Frazier.
California-based Engine No. 1 won the support of three large pension funds and different shareholders disappointed with Exxon’s efforts to chart a clean energy procedure. Exxon’s previous dismissal of governance and climate concerns additionally cost its support, investors have said.
Three proxy advisory firms that direct how investors vote upheld the hedge funds record. Institutional Shareholders Services recommended three of Engine No. 1’s candidates while Glass Lewis sponsored two of the hedge funds’ candidates
Exxon promised on Monday to add two new board members with energy and climate expertise within a year. Exxon’s share price has climbed 45% since the beginning of the year. Its stock was off 2% at $58.30 at early afternoon on Tuesday.
Exxon’s profits have slacked its global competitors, losing about 15% in the course of recent years.
The International Energy Agency (IEA) has said investors should quit funding new fossil fuel projects if they have to cut green house gas emissions by 2050.
