- Exxon Mobil has been a laggard in the oil and gas sector and has seen its market value decline by hundreds of billions of dollars.
- Pension giant CalSTRS is supporting a new activist fund effort to replace Exxon board members.
- Activists see this as a perfect time to seek short-term value creation in a better run company as well as more long-term support from investors if the company becomes clearer about its climate plan.
Exxon Mobil is poised for a new role in a changing world it doesn’t want: target and test case for a new form of combined attack from activist hedge funds and long-term impact investors focused on sustainability and climate change. A newly formed activist investor group, Engine No. 1, announced plans on Monday to seek four board seats at the oil and gas giant, and underlying the effort are both short-term and long-term goals to change the way Exxon approaches the energy business at a time of rapid transition forced by fears about carbon emissions.
The activist firm — which includes founders from successful activist hedge funds including Partner Fund Management and JANA Partners — thinks the time is ripe for an overhaul of Exxon’s management. The market stats cited in its letter to Exxon’s board highlight a significant drop in operating performance and “dramatic” decline in Exxon’s stock value in recent years as many investors have lost faith in the company.