CalSTRS backs proposed slate of independent directors to refresh Exxon board

Potential proxy access initiative at ExxonMobil

The California State Teachers’ Retirement System (CalSTRS) said it supports the plan of San Francisco-based asset manager Engine No. 1 to nominate four independent directors to the board of ExxonMobil ahead of its 2021 AGM normally held in May.  

Engine No. 1, a recently-created investment firm, has sent a letter to the company suggesting that the board needs to be refreshed as it “has no independent directors with any outside energy experience”.

Christopher Ailman, Chief Investment Officer at CalSTRS, said: “We intend to use our vote as an active shareholder to support Engine No. 1’s slate of directors because a change at the top is necessary to reposition this company to be successful for the long term.”

Engine No. 1 stated that ExxonMobil would be better equipped with a diversified level of insight at board level, capable of harnessing evolving trends and the policies that are shaping the future of the industry.

“Yet none of ExxonMobil’s independent directors have any other energy industry experience. This is not a criticism of any director, each of whom is highly accomplished and respected, including by us. It is instead an acknowledgement of the unique challenges facing ExxonMobil and the industry,” Engine No. 1 stated. 

The initiative follows numerous campaigns from investors to oppose the re-election of Exxon’s chair, Darren Woods, who also holds the position of CEO, over “significant concerns” about the company’s approach to “climate change, political lobbying and board independence”. A proposal to create an independent chair position was backed this year by 33% of shareholders, down from 41% the previous year. 

The director candidates are:

  • Gregory J. Goff, who served as CEO of Andeavor, a petroleum refining and marketing company;
  • Kaisa Hietala, with a background in upstream oil and gas exploration and crude oil trading, and a former EVP of Renewable Products at Neste, a petroleum refining company.
  • Alexander Karsner, who brings renewable energy experience and is Senior Strategist at X (formerly Google X), the innovation lab of Alphabet; and
  • Anders Runevad, who served as the CEO of  wind turbine manufacturing Vestas Wind Systems.

Earlier this year, Robeco led a campaign to get Samuel Leupold onto the board of Italian energy company Enel, also citing his expertise around the energy transition. Leupold had been CEO of Wind Power at Danish oil & gas firm DONG Energy during its transformation into a pureplay renewables company, now called Orsted.