Exxon in talks with activist on board changes

ExxonMobil said it is talking with activist investor Engine No 1 about adding new members to its board of directors.

San Francisco, California-based Engine No 1, with the backing of the California state teachers' pension fund, formally nominated four candidates for ExxonMobil's board today, part of its campaign to steer the oil major toward what it says should be better financial and environmental performance.

The nominees include Gregory Goff, former chief executive of US refiner Andeavor; Kaisa Hietala, the former head of renewable products at European refiner Neste; Alexander Karsner, a former US assistant secretary of energy and strategist at X, Alphabet's innovation lab; and Anders Runevad, former chief executive of wind turbine manufacturer Vestas.

ExxonMobil said it has been engaged with Engine No 1 since mid-December and that the company's board affairs committee will evaluate the nominees in line with the corporation's by-laws.

"We believe that ExxonMobil's board needs new members who have proven success positioning energy companies for today as well as tomorrow, and who are sufficiently independent from the current board to ensure a clean break from a strategy and mindset that have led to years of value destruction and poorly positioned the company for the future," Engine No 1 said.

ExxonMobil has been under pressure from investors on a number of fronts in recent months as it struggles to find its footing following last year's crude demand downturn. The company is laying off thousands of employees and contractors globally and cutting costs in response, as well as taking massive write-downs related to past investments in US natural gas shale assets.

ExxonMobil last month said it expects its fourth quarter 2020 petrochemicals business to get a boost from higher commodity prices, rising by $200mn-$400mn from about $500mn in the third quarter. But its refining business losses, which were about $200mn in the third quarter, could widen by another $100mn because or deteriorating margins and could take an additional $100mn-$300mn hit from mark-to-market derivatives.

The company reports fourth quarter earnings on 2 February.

By Tom Fowler