Exxon Mobil Corporation · NYSE:XOM
Exxon Mobil — Proxy Contest (April 2021)
20 slides from Exxon Mobil's proxy contest presentation, Apr 14, 2021
Slide 1: Reenergize ExxonMobil: Presentation to Climate Action 100+
ENGINE NO. 1 Reenergize ExxonMobil // Presentation to Climate Action 100+ April 14, 2021
Slide 2: Disclaimers: Important Information
Disclaimers Important Information Engine No. 1 LLC, Engine No. 1 LP, Engine No. 1 NY LLC, Christopher James, Charles Penner (collectively, “Engine No. 1”), Gre gor y J. Goff, Kaisa Hietala , Alexander Karsner , and Anders Runevad (collectively and together with Engine No. 1, the “Participants”) have
Slide 3: Disclaimers: Forward-Looking Statements
Disclaimers Forward - Looking Statements This presentation contains forward - looking statements. All statements contained in this presentation that are not clearly histor ical in nature or that necessarily depend on future events are forward - looking, and the words “anticipate,” “believe,” “expect
Slide 4: The industry is evolving, and so must ExxonMobil
The industry is evolving, and so must ExxonMobil O il and gas companies face significant long - term challenges. Declining long - term returns and lower capital productivity for non - state oil and gas companies Growing long - term demand uncertainty due to advancements in low and no - carbon techno
Slide 5: ExxonMobil has dramatically underperformed for shareholders over any relevant time period
ExxonMobil has dramatically underperformed for shareholders over any relevant time period Source: Bloomberg. *Pre - COVID returns are as of February 19, 2020. **Returns are as of December 4,2020 close, the last trading d ay prior to Energy No. 1’s public engagement with ExxonMobil. Total Returns inc
Slide 6: Returns on oil and gas projects have been falling for years
Returns on oil and gas projects have been falling for years, even during times of higher prices Chart Source: ExxonMobil 10 - Ks; Upstream ROCE excludes corporate investment and costs. 2020 ROCE includes $19.4bn in asset impairment, excluding which the ROCE is still negative ( - 0.4%). Quote Source:
Slide 7: ExxonMobil has pursued far more aggressive spending than peers
Despite this industry trend, ExxonMobil has pursued far more aggressive spending than peers • Irresponsible spending led to ExxonMobil entering 2020 with the highest break - even price of any of its peers, which destroyed value and left it heavily exposed Source: JP Morgan research; Pre - COVID data
Slide 8: ExxonMobil has been funding low-return projects by taking on large amounts of debt
ExxonMobil has been funding its spending on low - return projects by taking on large amounts of debt • While its balance sheet once had no net debt, today ExxonMobil has the most debt in its history, increasing over $80 billion in the last 12 years, and since 2016 has had three debt ratings downgrad
Slide 9: ExxonMobil positions itself to succeed only if fossil fuel demand grows for decades
ExxonMobil continues to position itself to succeed only if fossil fuel demand grows for decades • ExxonMobil is world’s 5th largest producer of greenhouse gas (GHG) emissions (after coal from China, Saudi Aramco, Gazprom, and Nat’l Iranian Oil Co.) • This is an existential business risk given that 2
Slide 10: Rather than changing its strategy, ExxonMobil is trying to change the facts
Rather than changing its strategy, ExxonMobil is trying to change the facts • In the past ExxonMobil dismissed total emissions reduction targets as a “beauty competition” • Now it claims its emissions reduction targets are “consistent” with the Paris Agreement • However, in setting such targets Exxo
Slide 11: ExxonMobil paints a misleading picture of its carbon capture capabilities
ExxonMobil paints a misleading picture of its carbon capture capabilities • ExxonMobil claims to be the “global leader” in carbon capture, yet most of this is necessary separation of the CO 2 that naturally occurs during the production of methane (the key ingredient in natural gas), which is capture
Slide 12: Minimal investment in advanced carbon capture appears focused on advertising
ExxonMobil’s minimal investment in more advanced carbon capture appears mostly focused on advertising • ExxonMobil has heavily advertised its investment in a company pursuing direct air capture, yet this investment is miniscule (reportedly $15 million) and appears primarily driven by marketing consi
Slide 13: Focusing on societal choices while trying to limit those choices is poor strategy
Focusing on societal choices while trying to limit those choices is poor long - term strategy • ExxonMobil argues that meaningful decreases in GHG emissions will require “changes in society’s energy choices coupled with the development and deployment of affordable lower - emission technologies” • Th
Slide 14: Reenergizing ExxonMobil requires real change
Reenergizing ExxonMobil requires real change Long - term commitment to a coherent returns - focused capex strategy CAPITAL ALLOCATION POSITIONS TO ENHANCE AND PROTECT LONG - TERM VALUE CREATION POSITIONS TO RISK CONTINUED LONG - TERM VALUE DESTRUCTION LONG - TERM STRATEGY INCENTIVES BOARD COMPOSITIO
Slide 15: Our board nominees fill the need for successful and transformative energy experience
Our board nominees fill the need for successful and transformative energy experience Quote Source: Derek Brower (Mar. 3, 2021). Exxon v. Activist . Financial Times. Robert Cyran (Mar. 22, 2021). More Than This . Reuters Breakingviews. Paul Sankey (Apr. 1, 2021). Morning Sankey 4/1/2021 . Sankey Rese
Slide 16: Gregory Goff – Proven experience to help focus on profitability
Gregory Goff – Proven experience to help focus on profitability and facilitate investment in the future • Served as President and Chief Executive Officer (2010 - 2018) of Andeavor (formerly Tesoro), a leading petroleum refining and marketing company • During his tenure, Andeavor generated total retu
Slide 17: Kaisa Hietala – Experience leading industry transformation from the inside
Kaisa Hietala – Experience leading one of the top industry transformations from the inside • Trained geophysicist and environmental scientist • Began oil and gas career in E&P and crude trading at Neste, then led strategic review that resulted in creation of the Renewable Products segment. Served as
Slide 18: Alexander Karsner – Highly successful experience looking around energy industry corners
Alexander Karsner – Highly successful experience looking around energy industry corners • Began career developing energy infrastructure. As a private equity investor, venture partner and advisor, portfolios have included some of the most successful clean tech startups of the past decade • Part of th
Slide 19: Anders Runevad – Experience in competitive power generation landscape
Anders Runevad – Highly successful experience in competitive power generation landscape • CEO of Vestas, which has more installed wind power worldwide than any other manufacturer, for six years ending in 2019 • During his tenure, stock returned a total of 480%, significantly outperforming the global
Slide 20: Thank you
Thank you