Wednesday 12 May 2021 7:24 pm

PIRC sides with activist investor in Exxon boardroom battle

Governance advisor Pensions & Investment Research Consultants (PIRC) has recommended Exxon Mobil shareholders vote in favour of four hedge fund board nominees, adding further fuel to the battle for Exxon’s boardroom.

Exxon and activist hedge fund Engine No. 1 are battling over board seats and Exxon’s strategy to meet demands for lower-carbon energy.

The fund has nominated four board candidates and criticised existing directors for a lack of “credible plan” as energy markets shift to cleaner fuels.

PIRC is the first of the major proxy advisory firms to release its report ahead of the company’s May 26 shareholder vote. Its report did not detail the reasons for its director recommendations.

It advised Exxon shareholders to vote for activist fund nominees – Gregory Goff, Anders Runevad, Kaisa Hietala and Alexander Karsner – and against five existing Exxon board members including chief executive Darren Woods.

PIRC also recommended that shareholders vote to split the combined CEO-board chairman roles at the largest U.S. oil company. A separate chair “can provide independent oversight of management and facilitates clearer lines of accountability with respect to corporate decisions,” it wrote.

Exxon and Engine No. 1. did not immediately respond to requests for comment.

Legal & General, a major investor in Exxon, yesterday said it will also back the activist hedge fund.

Engine No.1 has asked shareholders to vote against the re-election of former MetLife CEO Steven Kandarian, former Caterpillar CEO Douglas Oberhelman, former IBM CEO Samuel Palmisano, and former Petronas CEO Wan Zulkiflee.

PIRC urged support for shareholder proposals calling for greater disclosures on lobbying, reports on political contributions and how net-zero carbon emissions scenarios would impact the business.

Exxon has rejected the activist slate and has urged no votes on the proposals to split its chairman and CEO roles, and on the climate-related reports.