DJ Activist Pressure on Exxon Mobil Is Growing. Another Hedge Fund Might Join the Effort. -- Barrons.com
An activist showdown is emerging at Exxon Mobil.
Late Thursday, Bloomberg reported that Exxon Mobil (ticker: XOM) is considering adding activist investor Jeff Ubben to its board. Ubben's recently-launched Inclusive Capital Partners would then take what Bloomberg called a "meaningful stake" in Exxon if Ubben were added to the board. Hedge fund D.E. Shaw, which is reported to also be pushing for change at Exxon, is said to support adding Ubben.
Exxon declined to comment, and Inclusive Capital didn't immediately respond to requests to comment. Ubben's Inclusive Capital, launched in June, is focused on ESG investing.
The reported board shake-up comes as Exxon is already facing a proxy battle.
Late last year, Engine No. 1 -- an investment firm that was launched in December with a mission to drive "positive impact through active ownership" -- went after Exxon, pushing on the energy giant to invest more in renewable energy and cut spending in areas that have shown weak returns. Engine No. 1 nominated four members to Exxon's board late last month, saying it was disappointed by recent "incremental steps" Exxon has taken to appease shareholders.
Exxon reported a $20.1 billion loss for the fourth quarter earlier this week, due largely to impairments on natural gas assets. It also named former Petronas president and group CEO Tan Sri Wan Zulkiflee Wan Ariffin to its board and said it will launch a new business focusing on low carbon emissions.
Engine No. 1 wasn't impressed with what it called a "patchwork of announcements."
"Exxon Mobil shareholders deserve a Board that works proactively to create long-term value, not defensively in the face of deteriorating returns and the threat of losing their seats," the firm said Tuesday.
With the addition of Inclusive Capital, Exxon now finds itself facing three hedge funds -- not to mention the California State Teachers' Retirement System and the Church of England, which have expressed support for Engine No. 1. Separately, BlackRock (BLK), one of Exxon's largest shareholders, is making climate change a focus area for its 2021 investments.
Exxon shares climbed 3.5% in late morning trading Friday, while the S&P 500 was up 0.3%.
Write to Carleton English at email@example.com
(END) Dow Jones Newswires
February 05, 2021 11:33 ET (16:33 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.