Third Dissident Installed on Exxon’s Board

Former Department of Energy official Alexander Karsner joins two other dissident candidates on the oil and gas giant’s board after an activist battle viewed as a harbinger of ESG contests to come.

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ESG activist Engine No. 1 succeeded at installing a third of four dissident director candidates to the 12-person board of Exxon Mobil Corp., (XOM) according to preliminary results issued by the oil and gas giant Wednesday, June 2.

According to the filing, fund candidate Alexander Karsner, a senior strategist at the innovation lab for Alphabet Inc. (GOOGL), was elected, joining two other dissidents that Exxon had already projected to have won seats.

Karsner previously served as U.S Assistant Secretary at the U.S. Department of Energy, between 2006 and 2008, according to relationship mapping service BoardEx, a sister company of The Deal.

Karsner focused on energy efficiency and renewable energy while at the Department of Energy, BoardEx reported. He also held positions at some cleantech startups.

Karsner joins two other Engine No. 1 candidates that were approved by investors: Kaisa Hietala, who had held the role of executive VP for renewable products at Finish oil refiner Neste Oyj, and Gregory Goff, former chief executive of refinery company Andeavor.

The result is preliminary and can change. However, if confirmed, the addition of Karsner represents a major boost for an activist campaign with an environmental twist that was already viewed by many observers and investors as an inflection point for ESG activism, as it coupled a traditional director contest with an environmental-themed campaign urging Exxon to allocate capital towards solar and wind power and cut oil investments the fund deemed to be overly risky.

According to the results, Hiatala, Goff and Karsner received the ninth, tenth and eleventh most votes, enough to land them seats on the 12-person board.

Karsner received about 1.18 billion votes, just above incumbent candidates Steven Kandarian and Wan Zulkiflee, who weren’t elected to the board based on the preliminary results. Kandarian and Zulkiflee received about 1.17 billion and 1.13 billion votes.

If the results are approved by Exxon’s inspector of elections, incumbent director Zulkiflee, who served previously as group CEO of Malaysia’s national oil and gas company, Petronas, will have served a very short tenure. Zulkiflee was installed in February, after Engine No. 1 raised concerns that the energy giant’s board didn’t include any directors with current or previous oil and gas experience.

However, influential proxy adviser Institutional Shareholder Services raised concerns about Zulkiflee, suggesting that he may not be independent enough because he only recently retired from Petronas, which has important business links to Exxon. ISS added that Petronas, unlike Exxon, is a state-owned entity and doesn’t need to answer to public shareholders.

“Exxon needed to add a director that was unquestionably independent and that possessed experience at an entity more comparable to a global public energy company based in the United States,” ISS said.

About the author

Ronald Orol
Senior Editor at | + posts

Ronald Orol leads coverage of activist hedge fund managers, a high-profile group of corporate investors who press for blockbuster deals and were the subject of his book “Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.” Ron produces the Activist Daily and Activist Weekly briefings, which offer exclusives, trend pieces and breaking analysis about insurgent investors and their M&A efforts. Ron also authored “Corporate Governance in the Era of Activism,” a digital handbook for CNBC’s Jim Cramer. He previously worked as a financial regulation and activism reporter at MarketWatch and Dow Jones Newswires.

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