ExxonMobil is facing a possible internal shake up after a group of investors has demanded a change of leadership to better steer the company to its eventual transition to cleaner energy.
The uprising is expected to result in the company's biggest corporate boardroom fight as shareholders push for urgency in its shifting stance on climate change. The group of investors is reportedly pushing to replace four of Exxon's board members with executives they say are better suited to lead the company into the future.
Engine No. 1 - a minor stake stakeholder - along with other shareholders has mounted a challenge to shake up management. The shareholder is calling on the appointment of a slate of board members that are backed by the country's most powerful institutional investors.
According to sources familiar with the matter, Exxon is expected to conduct a vote at its annual shareholder's meeting Wednesday.
The group of shareholders said it wants to refresh the company's board of directors with members that have a track record of managing transitions in the energy sector. The group said Exxon had failed to catch up with its peers and that it lacks any credit strategy to create value in a de-carbonizing world.
"What we're finding with other oil companies is we're making progress, and Exxon needs to catch up. Exxon is still saying one thing and doing another," the California Public Employees' Retirement System - known as CalPERS - America's largest pension fund, said.
Exxon said it has continually been refreshing its board of directors with people that are able to do their jobs and are experts in the energy sector, transition and capital allocation. Exxon said it has also made significant strides in developing low-carbon solutions.
Exxon named a recent proposal to transform the Houston Ship Channel into a hub for its new carbon capture infrastructure. The company said it plans to spend more than $3 billion through 2025 to develop the technology, which involves capturing carbon dioxide from the air and storing it underground.
"You're seeing investors from all round the world that are wanting to see better disclosure around climate change risk, you're seeing shareholder proposals that are passing with increased shareholder support, and now we have this monumental vote at ExxonMobil" analysts at CalSTRS said.
