Please ensure Javascript is enabled for purposes of website accessibility

Report: Under Activist Pressure, ExxonMobil Mulling Changes to Its Board, Further Push Into Renewables

By Eric Volkman - Jan 27, 2021 at 6:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The struggling energy giant is apparently figuring out how to deal with investors agitating for change.

ExxonMobil (XOM 2.45%) is feeling the squeeze of not one but a pair of activist investors, and apparently planning to respond accordingly. An article published Wednesday in The Wall Street Journal, citing "people familiar with the matter," stated that the company is discussing changes to its board of directors and considering a ramp-up of investments in sustainable energy solutions.

The two activists pushing for changes in the company are D.E. Shaw Group and Engine No. 1. Also on Wednesday, the latter company formally nominated four candidates for ExxonMobil's board. In response, ExxonMobil issued a press release stating that its board affairs committee "will evaluate Engine No. 1's notice of nomination and nominees in line with the corporation's by-laws."

Oil rig with worker silhouetted in front.

Image source: Getty Images.

Adding to this, many investors and influential people in the corporate world have called for companies, particularly in the energy industry, to step up their game in regards to sustainability.

In its response to Engine No. 1, ExxonMobil addressed this concern for sustainability, writing that it will "provide updates on company performance and actions to address climate change, including initiatives to commercialize technologies which are key to reducing emissions and meeting societal goals consistent with the Paris Agreement."

This pressure could very possibly increase when ExxonMobil reports its fourth-quarter earnings next Tuesday. Many analysts and observers anticipate the company will book its fourth straight quarterly net loss -- a situation that would have been unthinkable during the oil bull market in the recent past.

ExxonMobil has posted losses due to a combination of increased spending and softened demand for oil and related products. The company announced plans to curb those expenditures, but that doesn't solve the problem of weak demand.

On Wednesday, ExxonMobil outperformed the S&P 500 index, declining by only 1.1% against the index's 2.6% fall.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
$89.03 (2.45%) $2.13

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.