The oil giant Exxon, heir to the Rockefeller empire, suffered an unprecedented snub on Wednesday, May 26, during its general meeting. An activist fund, Engine n ° 1, holding only 0.02% of the shares, succeeded in electing at least two representatives to the supervisory board.
This hedge fund only holds a stake of 54 million dollars (44 million euros) in Exxon, on a capitalization of 250 billion dollars (205 billion euros) approximately. But his boss, Chris James, who for months urged the company to cut capital spending and focus “On the acceleration rather than on the postponement of the transition” towards cleaner energies, has managed to take with it the large institutional investors of Wall Street. He felt that Exxon’s “all oil” policy put him at existential risk.
Engine # 1 started by winning over the California Teachers’ Pension Fund, which wasn’t the hardest part. But above all, he succeeded in tipping three major institutional investors, Blackrock, Vanguard and State Street, who together held more than 20% of the capital of the “major”. The vote battle was very costly, Engine n ° 1 and Exxon having spent respectively $ 30 million and $ 35 million in their communication war to convince shareholders, large and small, of the oil group.
This general meeting is a major personal failure for Exxon boss Darren Woods, who was personally involved in this fight. The boss of the American oil group is hardly in a good position, while his company lost 22 billion dollars in 2020, masterfully struck by the Covid-19 pandemic.
Exxon’s arrogance is legendary
The group, which was worth more than $ 500 billion in 2007 and was, less than ten years ago, the world’s largest capitalization, has lost its luster and is today only 33rd among global companies. According to Clareo consultant Peter Bryant, Exxon is vulnerable, without determined backers, because it has not invested in renewables and has not performed well in its pure oil business either. “It’s the worst of both worlds”, declared to Wall Street Journal Mr. Bryant.
Exxon has always explained that its job was to exploit oil and has always rejected the strategy followed in particular by its European competitors, which, like Total, invest heavily in renewable energies and ultimately want to achieve carbon neutrality. Its CEO refused to embark on this path as proposed by Engine n ° 1.
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