Leading Proxy Advisory Firm ISS Recommends ExxonMobil Shareholders Vote Engine No. 1’s WHITE Proxy Card “FOR” Engine No. 1 Nominees
ISS Believes the
Engine No. 1 Urges ExxonMobil Shareholders to Vote the WHITE Proxy Card TODAY “FOR” its Independent, Highly Qualified Nominees
Engine No. 1 commented, “We are pleased that ISS recognizes that the ExxonMobil Board requires new members with track records of transformative success in the energy sector to create sustainable, long-term value for shareholders in a changing industry and world. ISS’ recommendation is further validation of our belief that addressing the fundamental issues at
“Engine No. 1’s four independent nominees are accomplished business leaders who, as directors, will bring much-needed energy, capital allocation, and technological expertise to the Board and leverage it to help ensure
In making its recommendation “FOR” Engine No. 1’s nominees ISS noted*:
- “On the basis of operational performance alone, the dissident has made a compelling case that additional board change is needed to provide shareholders with sufficient confidence in the sustainability of XOM's business – an immediate concern, and one that should arguably take precedence in the order of operations over an assessment of the general sustainability of the industry.”
- “The lack of unquestionably-independent board members with relevant industry experience remains a significant shortcoming. The absence of this experience can impair a board's ability to oversee management, particularly in such a technical field, and the capacities of individual directors can be misguided or even muted without the complement of an industry perspective. In this case, it appears that the board's ability to effectively oversee management was in fact compromised, as evidenced by the inflexible capital allocation practices that were allowed to set in over the past several years. Importantly, this oversight failure cannot be attributed to a lack of industry experience alone. The board includes several current or former CEOs, all of whom are presumably experienced with capital allocation. The signs were also detectable, and they were repeated, which together suggest that the board may have been overly deferential to management. This calls into question the board's willingness to address other uncomfortable and important issues, particularly if they have attendant concerns that are less immediate or more challenging to quantify – such as XOM's preparedness for an energy transition.”
- “The dissident also presents convincing arguments about XOM's positioning for an energy transition, making the case that related issues need to be addressed in a more realistic and open manner… XOM models the future using demand and technology assumptions that may be credible in isolation, but appear to be overly-optimistic when assembled and considered holistically. More importantly, XOM does not provide enough information about these assumptions for shareholders to fully assess the viability of its strategy for an energy transition.”
“Although management's message about its commitment to the dividend has been consistent, the concerns raised by shareholders appear to be justified. Between 2017 and 2020, XOM incurred an
$19.6 billioncumulative cash flow deficit. XOM also added $25.3 billionof debt over the period, bringing the total figure to $67.6 billionin 2020. Management has established a "hard limit" on total debt of $70 billion. This limitation could conceivably compromise the dividend if XOM continues to miss cash flow projections. In addition to concerns about reliability, there are concerns about dividend growth.”
Engine No. 1 encourages all
Vote the WHITE proxy card TODAY to Reenergize ExxonMobil.
*Engine No. 1 has neither sought nor obtained consent from ISS to use previously published information in this press release. Bolding and underline added for emphasis.
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About Engine No. 1
Engine No. 1 is an investment firm purpose-built to create long-term value by driving positive impact through active ownership. The firm also will invest in public and private companies through multiple strategies. For more information, please visit: www.Engine1.com.
Engine No. 1 LLC, Engine No. 1 LP, Engine No. 1
Information about the Participants and a description of their direct or indirect interests by security holdings is contained in the definitive proxy statement filed by the Participants with the
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Source: Engine No. 1