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.
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 votes for former AndeavorChief Executive Gregory Goff and Alexander Karsner, 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.
Exxon had a historic loss in 2020 but shares are up more than 40% this year.
In addition to backing Goff and Karsner from the activist slate, Glass Lewis recommends votes in favor of eight current Exxon directors including CEO Darren Woods.
By choosing Engine No. 1’s proxy card instead of the company’s, Glass Lewis’ recommendation leaves out current Exxon directors including former 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.