Advisory firm Glass Lewis backs two dissident nominees in Exxon battle

[May 18, 2021]  (Reuters) -Advisory firm Glass Lewis recommended on Monday that Exxon Mobil shareholders elect two of hedge fund Engine No. 1's four board nominees in a proxy contest at the largest U.S. oil producer.

A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. REUTERS/Jessica Rinaldi

Tiny activist fund Engine No. 1 has taken aim at Exxon's board and its future direction in the first major shareholder contest to make climate change a top issue. The fund has criticized Exxon for poor financial returns and a lagging approach to the transition to lower-carbon energy.

Glass Lewis recommended that shareholders vote for Gregory Goff, former chief executive at oil refiner Andeavor, and Alexander Karsner, a former U.S. Assistant Secretary of Energy for efficiency and renewable energy.

It is the third proxy advisor to support part or all of Engine No. 1's slate.

"Electing even a portion of Engine 1's slate would send a clear message of shareholder dissatisfaction with Exxon's recent direction and strategy," Glass Lewis said in its report. It also said Exxon had underperformed peers and its energy transition plan was "generally insufficient and lacking in key areas."

Exxon and Engine No. 1 could not be immediately reached for comment on Monday.

In addition to backing Goff and Karsner from the activist slate, Glass Lewis recommends votes in favor of eight current Exxon directors including Chief Executive Officer Darren Woods.

By choosing Engine No. 1's proxy card instead of the company's, Glass Lewis' recommendation leaves out current Exxon directors including MetLife CEO Steven Kandarian, former Caterpillar CEO Douglas Oberhelman, former IBM CEO Samuel Palmisano and former Petronas CEO Wan Zulkiflee.

The 12 nominees with the most votes will win board seats.

Proxy advisor Institutional Shareholder Services backed three of the four dissident directors while Pensions & Investment Research Consultants (PIRC) has backed all four Engine No. 1 candidates.

The recommendations are influential for institutional investors and often guide votes at corporate meetings. Exxon's shareholders meet on May 26.

(Reporting by Jennifer Hiller; Editing by Jacqueline Wong and Christian Schmollinger)

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