Exxon Board to Get a Third Activist Pushing Cleaner Energy

The new board member will likely join two other candidates put forward by an activist investor who were declared winners last week.

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Activist investors who dealt a stunning defeat to Exxon Mobil last week secured a third seat on the company’s board on Wednesday when the oil giant announced updated results of a shareholder vote.

While the first two new dissident board members were oil company veterans, the newest member, Alexander A. Karsner, has strong environmental credentials and is expected to pose more of a challenge to senior management. Mr. Karsner’s election sharpened the investor rebuke of the company’s management, which has produced lackluster returns for about a decade.

Investor discontent with Exxon had been building because the company has invested in a number of projects, acquisitions and strategies that have not paid off, including Canadian oil sands and natural gas fields. Critics also believe that the company has been very slow to adapt to a changing energy industry and done too little to reduce carbon emissions even as many European oil companies began investing in wind turbines, solar farms and hydrogen.

The investors challenging Exxon were led by a small hedge fund called Engine No. 1. Last week the activists secured enough votes to put two people on the oil producer’s board, the first time candidates picked by the company’s management have lost an election, according to analysts. Engine No. 1 has sought to push Exxon to move toward cleaner energy and away from oil and gas.

Exxon said last week it needed more time to determine who won the last two of the 12 seats on its board. Engine No. 1 had put up four candidates. Exxon said that one of two remaining candidates did not secure enough votes but that Mr. Karsner was still in contention.

On Wednesday, the company said its latest results were preliminary and would be certified before being filed with the Securities and Exchange Commission.

Having a third director on the board will give the activists greater say in big corporate decisions and Exxon’s strategy, though they will still be up against nine people picked by the company’s management who will presumably be more likely to back executives on crucial questions.

“We are grateful for shareholders’ careful consideration of our nominees,” said Engine No. 1 in a statement, “and are excited that these three individuals will be working with the full board to help better Exxon Mobil for the long-term benefit of all shareholders.”

Mr. Karsner is a senior strategist at X, a division of Google’s parent company Alphabet, and has been an executive at various energy, technology and investment businesses. Companies he has worked at have built solar plants in Morocco. Between 2006 and 2008, Mr. Karsner was an assistant secretary of energy for energy efficiency and renewable energy during the Bush administration.

In that role, he supervised the Energy Department’s applied science programs and helped negotiate the United States’ re-entry into the United Nations Convention on Climate Change, which eventually led to the 2015 Paris climate agreement. He has been a member of the board of Conservation International, an environmental group that works to protect forests that absorb climate-warming carbon.

Exxon Mobil announced the election results in a bland statement that thanked shareholders for “their ongoing support for our company.”

“We look forward to working with all of our directors to build on the progress we’ve made to grow long-term shareholder value and succeed in a lower-carbon future,” the company said.

Darren W. Woods, Exxon’s chairman and chief executive, was re-elected to the board. His answer to the challenge posed by climate change has been to build a business that captures carbon dioxide from industrial plants and buries it deep underground. Exxon recently proposed a $100 billion carbon capture project for plants along the Houston Ship Channel that could be a model for the world. But in order to be viable, the project will likely require a carbon tax or other mechanism to put a price on carbon emissions. Lawmakers in Washington have been reluctant to embrace a carbon price.

The new activist-backed directors may support Exxon’s carbon-capture efforts, but probably will push for other clean energy initiatives, as well. Executives at Engine No. 1 have said the new directors need to get on the board and study company businesses before pushing for fundamental changes. The directors have declined requests for interviews.

The three directors nominated by Exxon’s management who were not elected are Samuel Palmisano, a former chief executive of IBM; Steven Kandarian, a former Met Life chief executive; and Wan Zulkiflee, chairman of Malaysia Airlines and the former chief executive of Petronas, Malaysia’s state-owned oil company.

The activist-backed directors who were declared winners last week are Gregory Goff, a former chief executive of the refiner Andeavor who had a long career at Conoco Phillips, and Kaisa Hietala, an environmental scientist who was a senior executive at Neste, a Finnish refiner. Both have experience in biofuels.

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