Hedge Fund Manager Partners with California Pensions to Elect 2 New Directors for ExxonMobil

Posted on 05/26/2021


Activist hedge fund firm Engine No. 1 GP LLC (Engine No. 1 LLC) showcased four independent director candidates for the board of Exxon Mobil Corporation. The California Public Employees’ Retirement System (CalPERS), California State Teachers’ Retirement System (CalSTRS), and New York State Common Retirement Fund backed the Engine No. 1 candidates.

Exxon Mobil shareholders voted to replace at least two board directors with activist investor nominees. For two more seats on the board, the vote was too close to call. State Street Corporation also voted for two candidates put forward by Engine No. 1 for Exxon Mobil’s board.

Engine No. 1 was formed in 2020 by Chris James (age 51) with the sole purpose of challenging Exxon’s corporate strategy. Engine No. 1 holds a tiny fraction of Exxon shares, just 0.02%. Engine No. 1 worked with the large pensions to garner support like CalSTRS. Chris James co-founded one of the biggest technology hedge funds in the early 2000s. As of April 30, 2021, Engine No. 1 managed approximately US$ 240,000,000 in regulatory assets under management. Chris James previously co-founded Andor Capital Management, L.L.C., a hedge fund that shut down. Charlie Penner, who previously worked at activist hedge fund Jana Partners, joined Engine No. 1.

Gregory J. Goff and Kaisa Hietala were elected to the board.

Candidates
Gregory J. Goff – Mr. Goff has a long track record of success in the energy industry. He served as the CEO of Andeavor, a leading petroleum refining and marketing company formerly known as Tesoro, for eight years ending in 2018. During his tenure, Andeavor generated total returns of 1,224%, versus 55% for the U.S. energy sector. He was named one of the “Best-Performing CEOs in the World” by Harvard Business Review in 2018.

Kaisa Hietala – Ms. Hietala is an experienced leader in strategic transformation in the energy sector who began her career in oil and gas exploration and crude oil trading. She served as the EVP of Renewable Products at Neste, a petroleum refining and marketing company, for five years ending in 2019. During her tenure, the Renewable Products segment’s revenues grew by 1.6x and operating profits grew by 4x. She played a central role in the strategic transformation of Neste into the world’s largest and most profitable producer of renewable diesel and jet fuel, which was named by Harvard Business Review as one of the “Top 20 Business Transformations of the Last Decade” in 2019.

Alexander Karsner – Mr. Karsner is an accomplished energy industry entrepreneur and policymaker with more than three decades of global conventional and renewable energy experience. He began his career developing and financing large scale energy infrastructure, and as a private equity investor, venture partner, and advisor, his portfolios have included some of the most successful cleantech startups of the past decade. He previously served as U.S. Assistant Secretary of Energy, responsible for multi-billion dollar federal R&D programs. He is Senior Strategist at X (formerly Google X), the innovation lab of Alphabet Inc., and a Precourt Energy Scholar at Stanford University’s School of Civil and Environmental Engineering.

Anders Runevad – Mr. Runevad is a successful business leader with global energy experience and was a signatory of the United Nations Paris Climate Agreement. He served as the CEO of Vestas Wind Systems, a wind turbine manufacturing, installation, and servicing company with more installed wind power worldwide than any other manufacturer, for six years ending in 2019, and is credited with turning around the company. During his tenure, Vestas stock returned a total of 480%, significantly outperforming the global energy and industrials sectors. He appeared on Fortune’s “Businessperson of the Year” list in 2016 and was named one of the “Best-Performing CEOs in the World” by Harvard Business Review in 2016, 2017, and 2019.
Source: Engine No. 1 Press Release.

Royal Dutch Shell
Across the pond, a Dutch court in The Hague ruled against Royal Dutch Shell plc in a climate change-related case. The court ordered Royal Dutch Shell to reduce carbon emissions by a net 45% by the end of 2030. The court ruled in favor of Milieudefensie — Friends of the Earth Netherlands — along with 17,000 co-plaintiffs and six organizations in its legal action against Shell.

Keywords: California State Teachers Retirement System, California Public Employees Retirement System.

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