A coalition of Exxon Mobil Corp investors wants the oil company to replace its chief executive officer and move more aggressively to slash greenhouse gas emissions, saying its newly appointed board members and management team have not done enough to transition to clean energy or overhaul spending.
Six months after hedge fund Engine No. 1 successfully placed three new directors on Exxon’s board, the Coalition for a Responsible Exxon (CURE) said management and the board have been too slow to reshape the company.
Exxon’s earnings have recovered from losses in 2020, posting third-quarter earnings of $6.8 billion on the back of rising oil prices, but the company has taken a slower approach to energy transition investment than most other oil majors.
“CURE awards the new board an overall grade of D- for failing to make any tangible progress on the targets set by us, other shareholders and independent observers at the time of the annual meeting,” CURE, which has 145 members and oversees $2.5 trillion in assets, said in a report released on Thursday.
The group said Exxon’s corporate plans to 2027, released earlier this month, do not meet a climate transition plan consistent with holding the rise in the world’s temperature to 1.5 degrees Celsius. The group said the plan fails to set segment-specific reduction targets for Exxon’s midstream and downstream businesses.
Exxon set annual capital spending through 2027 at $20 billion to $25 billion, allocating money to low-carbon projects and extending its previously projected investment rate for two years.
The company said its plans increase spending to $15 billion on greenhouse gas emission-reduction projects over the next six years while maintaining disciplined capital investments in its industry-leading portfolio.
“The plans support the corporate strategy of continued structural cost savings, investment in low-cost-of-supply and lower-emission products, and further portfolio high-grading, positioning the company to double earnings and cash flow by 2027 versus 2019,” Exxon spokesman Casey Norton said.
He added that the company is on track to meet its 2025 greenhouse gas emission-reduction plans by the end of 2021, four years ahead of schedule, and said the company developed more aggressive plans for further Scope 1 and Scope 2 reductions through 2030, consistent with Paris Agreement pathways.
GROUP TARGETS CEO
The coalition again pushed Exxon to split its chairman and chief executive posts.
Exxon, one of America’s most well-known brands, has five new directors, including three voted in by shareholders earlier this year. CURE previously said the company’s willingness to appoint the new directors signaled it “may intend to change.”
CURE is now calling for CEO Darren Woods to be replaced and for the company to appoint an independent board chairman. The group also said the company’s CEO and other top executives should receive incentive packages tied to achieving the 1.5 degree-aligned greenhouse gas targets.
The coalition also took issue with Woods’ pay, noting that he was paid millions even as the company’s value declined by billions of dollars in recent years.