Dividends and ExxonMobil’s governing structure fails energy transition: hedge fund founder

If you want to affect change you can do it from outside or inside a company. when buying shares often times you need a number of shares to be consider more than a gadfly, in which your issue can be brought to the AGM because you own shares but the company can do or not do. In the case of a hedge fund called Engine No 1, they were able to buy shares and in an upset move gather enough shares to have 2 representatives join the Exxon Board of Directors.

In an article by Pratima Desai of Reuters, the head of Engine No 1 Chris James gave an interview at the Reuters Next Conference about being on the inside of the largest oil company in the US.

Mr. James noted while ExxonMobil has some of the most talented engineers in the world, management has prevented them from unleashing their power they have to create value in energy transition. Instead Mr. James said ExxonMobil has invested in new projects in the oil and gas arena that should not have been approved and wasted capital.

On the other side of the coin, is since November 2020, Exxon’s shares are up 60%. Exxon says it evaluates our investments across a range of scenarios – including net-zero pathways- and we look forward to sharing more details in the coming months.

Linking to dividend paying stocks, oil and gas companies for generations have been long term generators of profits and dividends and ExxonMobil is the second largest dividend payer on the stock market. What balance should it take in regards to the climate change in the world? Given most of us still need oil and gas to drive our cars and heat our homes?

There are more questions than answers, till the next time – to raising questions.

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