Engine No 1 Challenges Exxon Mobil

Engine No 1, a hedge fund, has been making waves in the corporate world by challenging the leadership of Exxon Mobil. This is not just a minor skirmish; Engine No 1 owns a significant stake in the company.

The hedge fund's goal is to push Exxon Mobil to transition faster to renewable energy sources. This is a bold move, especially considering Exxon Mobil's long history of resisting change.

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Engine No. 1's activism against Exxon Mobil was a significant milestone in the company's history.

The hedge fund launched a proxy fight to replace four members of Exxon's board of directors, citing the company's lack of transparency around its emissions goals and failure to address climate change risks.

Engine No. 1's goal was to have Exxon commit to reducing its greenhouse gas emissions in line with the Paris Agreement.

Exxon Mobil opposed the activist campaign, accusing Engine No. 1 of being motivated by short-term profit rather than long-term value.

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However, Engine No. 1 was able to garner the support of the "Big 3" investment advisers to index funds: BlackRock, Vanguard, and State Street Global Advisors, who held approximately 21% of ExxonMobil's voting stock.

The hedge fund cleverly appealed to the Big Three's desire to be perceived as making a difference in helping to mitigate climate change, an important issue for millennials.

Exxon Mobil shareholders eventually elected three Engine No. 1 nominees to the oil company's board, extending the firm's upset victory.

This marked the first time in Exxon's history that an activist investor had succeeded in winning seats on the company's board.

The victory was a major blow to the fossil fuel industry and put pressure on Exxon and other companies to transition to cleaner energy sources and improve their climate governance practices.

Engine No. 1's plans are centered around preparing ExxonMobil for a future without fossil fuels. This is a significant shift, given the company's reputation as the mightiest oil company in the U.S.

Engine No. 1's victory was a major upset, with the hedge fund winning three seats on ExxonMobil's board. This unprecedented move signals a new era of influence for Engine No. 1.

ExxonMobil's board will now be tasked with implementing Engine No. 1's vision for a fossil fuel-free future. It's a bold move, but one that could have far-reaching consequences for the industry.

Engine No. 1's success is being hailed as a new David-and-Goliath tale for Wall Street. This narrative highlights the potential for smaller players to make a big impact in the world of finance.

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Engine No. 1's activism was a game-changer for ExxonMobil, convincing enough shareholders to elect three of its four nominees to ExxonMobil's board of directors despite having limited ExxonMobil common stock.

This was an astonishing accomplishment, especially considering Engine No. 1's lack of specific recommendations to enhance shareholder value or move the company into profitable low carbon emissions.

Engine No. 1 succeeded by garnering the votes cast by the "Big 3" investment advisers to index funds: BlackRock, Vanguard, and State Street Global Advisors.

These three firms had delegated voting authority for approximately 21% of ExxonMobil's voting stock, but their actual voting power was likely much higher.

Engine No. 1 cleverly appealed to the Big Three's desire to be perceived as investment advisers making a difference in helping to mitigate climate change, an important issue for millennials.

This appeal won out over the need to implement value-enhancing change at ExxonMobil, the primary objective of traditional hedge fund activism.

BlackRock ended up supporting three Engine No. 1 director nominees, while Vanguard and State Street Global Investors each supported two.

Engine No. 1 was born out of Chris James' attempt to start a new coal mine in the mid-2000s, which made him realize the need for a radical shift in the use of energy.

James hired Charlie Penner to lead the charge in activist investing campaigns, including the one at ExxonMobil.

Penner had worked previously at Jana Partners, a 20-year-old firm known for its interventionist approach.

Engine No. 1 launched a proxy fight to replace four members of Exxon's board of directors, arguing that the current board was not adequately addressing the risks of climate change.

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Engine No. 1 is a pioneer in the private equity business. They focus on transforming companies in the energy sector.

Their private equity approach involves acquiring a significant stake in a company, typically between 3% to 10%. This allows them to influence the company's direction without taking control.

One of their notable investments is in Occidental Petroleum, where they acquired a 12.1% stake. This move helped them push for changes in the company's leadership and operations.

Engine No. 1's private equity strategy is centered around creating long-term value for their investors. They do this by identifying companies with potential for growth and improvement.

Their investment in Occidental Petroleum is a prime example of this strategy. They acquired the stake to push for changes that would benefit the company and its shareholders.

Engine No. 1's private equity approach is a key part of their overall business strategy. They use their expertise and resources to drive positive change in the companies they invest in.

Their focus on the energy sector is driven by their desire to create sustainable and profitable businesses.

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Engine No. 1's victory against Exxon Mobil was a major blow to the fossil fuel industry.

The agreement reached on May 26, 2021, marked the first time in Exxon's history that an activist investor had succeeded in winning seats on the company's board.

Engine No. 1's victory is likely to embolden other activist investors to push for change in oil and gas companies.

Exxon and other fossil fuel companies are now under pressure to transition to cleaner energy sources and improve their climate governance practices.

Engine No. 1's ultimate goal was to have Exxon commit to reducing its greenhouse gas emissions in line with the goals of the Paris Agreement.

The victory of Engine No. 1 served as a turning point in business, one that will have long-lasting effects on how big oil companies are run.

Exxon Mobil's operations are conducted in more than 75 countries around the world, highlighting the global impact of the company's environmental practices.

The case highlights the importance of activist investors in holding corporations accountable for their environmental impact.

Engine No. 1's victory paved the way for more investment in renewable energy and marked a significant shift in the way corporations address climate change.

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Engine No. 1 was set up by veterans in the investment industry, specifically Chris James, the fund's founder.

Chris James has a long history in the investment industry, starting his career as an analyst in 1991.

He co-founded Andor Capital Management in 2001, where he managed the fund's tech portfolio.

Andor survived until the financial crash of 2008, when the firm shut down and returned its $2 billion in assets under management to investors.

Chris James had already split with Andor by then, setting up Partner Fund Management in 2004 with about $430 million in assets.

Partner Fund Management invested $96 million in Theranos, the blood-testing startup, in 2014.

Theranos' science came into question soon after, and in 2016, Partner sued Theranos, claiming it had been misled.

The two parties eventually reached a $43 million settlement out of court the following year.

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