Mar 1, 2021 - Economy

Exxon adds activist investor to board in latest move to revamp oil giant

Data: Yahoo Finance; Chart: Axios Visuals

ExxonMobil Monday morning announced two additions to its board as the oil giant faces pressure to boost financial performance and do more on climate.

Driving the news: Activist investor Jeffrey Ubben and Michael Angelakis, CEO of the investment company Atairos and a former senior Comcast Corp. official, are the board's two newest members.

  • Exxon's stock was up around 4% in premarket trading and has generally been on an upward trend in recent months.

What's next: This week should bring even more signs about the company's future.

  • The Texas-based multinational holds its annual investor day on Wednesday at a time of unusual scrutiny on Exxon and oil majors more broadly.

Why it matters: The pandemic-induced price and demand cuts put the industry in a tailspin last year, but both are now rebounding, with crude prices at their highest level in over a year.

  • Nonetheless, the sector is under pressure to do more on climate change and prepare for a world where a peak in oil demand may not be far off.
  • That's all especially relevant to Exxon, which had extremely aggressive multiyear oil-and-gas investment plans before the crisis; has performed unevenly in recent years; and has not thus far not matched the diversification efforts of its European peers.

Where it stands: Exxon's stock is still only at about half the levels achieved in the mid-2010s. Exxon, which lost $22 billion last year, has announced a bunch of changes in recent weeks and months, including...

  • Slashing planned capital spending, which is flexible but for now projected at $20-$25 billion annually through 2025, compared to pre-pandemic plans of $30-$35 billion.
  • The company has unveiled new emissions targets recently and a month ago added the former CEO of Malaysian oil-and-gas giant Petronas to its board.

The intrigue: Some activist investors are looking for bigger changes in Exxon's capital spending levels and emissions policies.

They include the investment group Engine No. 1, which has nominated its own slate of four new members to Exxon's board, including clean technology veterans.

  • But CNBC reports D.E. Shaw, another investment group pushing Exxon for changes, is expected to support the new board additions.
  • Their piece this morning also has details on the new board members.

What they're saying: Exxon CEO Darren Woods, in a statement, said Ubben and Angelakis have expertise that has helped companies "navigate complex transitions."

  • "Their contributions will be valued as ExxonMobil advances plans to increase shareholder value by responsibly providing needed energy while playing a leadership role in the energy transition.” 
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