Unique-New York state pension fund backs activist nominees in Exxon proxy battle By Reuters

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© Reuters. FILE PHOTO: An Exxon sign can be seen at a gas station in the Chicago suburb of Norridge

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By Jennifer Hiller

HOUSTON (Reuters) – The New York State Pension Fund threw its support behind an activist fund nomination list on Friday Exxon Mobil Corp (NYSE 🙂 board of directors is fueling a proxy battle for the company’s future.

The largest US oil producer Exxon and the activist hedge fund Engine No. 1 are battling for seats on board after historic net loss of $ 22.4 billion in 2020. The fund criticized the producer for “significant underperformance” and a delayed approach to cleaner fuels.

The Exxon board “needs revision” to better manage climate risks and lead the company into a low-carbon future, said Thomas DiNapoli, NY State Comptroller.

Activist Fund nominees include Gregory Goff and Anders Runevad, former directors of the Andeavor oil refinery and wind turbine manufacturer Vestas Wind Systems, respectively; Kaisa Hietala, former head of renewable fuels at Finish Refiner Neste; and former US Deputy Secretary of Energy for Efficiency and Renewable Energy, Alexander Karsner.

“We are excited to have a new list of candidates to support,” said DiNapoli. “We support Engine No 1’s candidate list because they bring transformative industry experience and we hope it isn’t too late to turn the tide at Exxon and improve performance.”

Exxon and Engine # 1 did not respond to requests for comment.

Motor # 1 was also supported by the California State Teachers’ Retirement System (CalSTRS), the second largest US retirement fund. DE Shaw hedge fund plans to coordinate with the company, according to people familiar with the matter.

The New York State Pension Funds overseen by DiNapoli will also vote for existing Exxon board members Kenneth Frazier and Ursula Burns. Two out of three board members Exxon has added in recent months are activist investor Jeffrey Ubben and former Comcast CEO (NASDAQ 🙂 Michael Angelakis, but will withhold votes on the remaining directors, it said.

It’s not in favor of oil manager Tan Sri Wan Zulkiflee Wan Ariffin, a former CEO of Malaysia’s state-owned energy company Petronas, whom Exxon also named to its board of directors earlier this year.

According to Refinitiv, the funds hold 8.14 million shares of Exxon. The fund previously submitted proposals from shareholders asking Exxon for details of its business that may be affected by climate change. It has also supported proposals to split the roles of CEO and chairman at the oil producer.

The battle for seats on the board of directors costs Exxon at least $ 35 million more than the typical cost of proxy voting. The largest U.S. oil producer is bringing together executives, television appearances, social media, and websites to refute the challenge. [nL1N2M70X0]

Engine # 1 has a $ 30 million budget for the fight.

Exxon also urges shareholders to reject proposals to divide chairman and CEO roles and to block climate-related reports from other groups.

To mitigate investor criticism, the company has recently expanded its board of directors to pledge to step up low-carbon initiatives, improve climate disclosure, and reduce the intensity of its greenhouse gas emissions in the oilfield.

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