The Norwegian sovereign wealth fund revealed today it will abstain from voting on the rebel motions being proposed at next week’s annual general meeting (AGM) at US oil giant ExxonMobil, keeping itself out of the upcoming battle for influence over the company being waged by activist fund Engine No.1.
Norges Bank Investment Management (NBIM), the manager of the NOK11trn (€1.1trn) Government Pension Fund Global (GPFG) – the eighth largest shareholder in Exxon with a 0.9% stake – published its voting intentions for the 26 May event, which it categorises as a “proxy contest” rather than an AGM.
In the table detailing those intentions, NBIM has written “do not vote” alongside the proposals for new directors from Engine No.1 on the rebel white voting card, giving no rationale for the decision.
The disclosure from the SWF also shows it intends to vote in favour of all the management proposals on the blue voting card, except on the election of the chair and chief executive officer of Exxon, Darren Woods, where it plans to withhold its vote.
The rationale NBIM provides for not supporting Woods’ re-election is its principle that the roles of chairperson and CEO should not be held by the same individual.
NBIM, which had NOK13.7bn of Exxon shares at the end of 2020, also shows in the table on its website that it is intending to actively oppose certain voting recommendations from Exxon’s management, such as the recommendation to vote against shareholder proposals to require an independent chair, and report on political contributions, lobbying payments and climate lobbying.
In these cases, NBIM has provided a rationale for its divergence from Exxon management’s advice, with that reasoning based on the global voting guidelines which it publishes on its website.
However, it has made no comment on the decisions to abstain.
“We provide a rationale in the case where we vote against management recommendation, not in the cases where we abstain,” a spokeswoman for the central bank subsidiary told IPE.
Next Wednesday’s AGM at Exxon, which will be live-streamed, looks set to be a fierce contest, with Engine No.1 having gained backing from ISS, the world’s largest proxy voting service. ISS advised shareholders earlier this month to vote for three of the four director nominees on the activist fund’s slate.
Legal & General Investment Management (LGIM), which owns a 0.5% stake in Exxon worth $1.3bn (€1.1bn), has said it will vote for the alternative slate, and the biggest US pension fund, CalPERS, has also come out in support of the opposition card.
The $392bn Californian pension fund said on 10 May: “In order to effectively oversee the transition to a low-carbon economy, we believe the board would benefit from additional expertise in both its core business and in renewable energy technologies.”
However, Exxon’s three largest investors are the asset management behemoths Vanguard, BlackRock and State Street, with stakes of 8.2%, 6.7% and 5.8% in the company, respectively – none of which have expressed their voting intentions.
Many large asset managers are in the habit of not disclosing their voting behaviour before shareholder meetings, although LGIM is selectively pre-announcing voting positions and Neuberger Berman is in its second year of an advance vote disclosure initiative.
Engine No.1 said on Wednesday that Exxon shareholders had “a pivotal decision” to make about the future of ExxonMobil at next week’s meeting.
“Maximizing the chances of success for ExxonMobil will require not just rhetoric and aspirations but years of diligent and honest effort with the oversight and assistance of a board that has track records of profitably looking around corners in the energy industry,” it said.
But the Texas-based oil company has urged shareholders to vote for the proposals on its blue card, saying it has an investment plan to grow earnings and continue putting money into lower-carbon technologies to “support societal net-zero ambitions”.