Shareholder proxy firm Institutional Shareholder Services recommended supporting the Engine No. 1 hedge fund, which wants Exxon Mobil to accelerate its transition to lower-carbon strategies following its first annual loss as a public company on February 2.
ISS said shareholders should vote for the election of Gregory Goff, Kaisa Hietala and Alexander Karsner at Exxon's annual meeting on May 26 after what it called a "compelling case that additional board change is needed to provide shareholders with sufficient confidence in the sustainability" of its business.
"We offered Engine No. 1 the same opportunity we offered D.E. Shaw, and we think they're very supportive of the direction of the company," CEO Darren Woods told CNBC Friday, referencing an approach the investment group made earlier this year that ultimately resulted in the addition of Jeff Ubben and former Comcast CFO Mike Angelakis to the board.
"Engine No. 1 were not interested in engaging, they were only interested in us exiting the businesses we were currently in and undermining our plans, and the strength of those plans, and frankly putting the company's future and the dividend in jeopardy."
Exxon Mobil shares were marked 1.85% higher in late-morning trading Friday to change hands at $60.38 each, a move that extends the stock's year-to-date gain to around 46%.
Last month, The California Public Employees' Retirement System (CalPERS) weighed into Exxon's ongoing battle with the activists, saying it it plans to support the hedge fund's board nominees.
Exxon said in late April that there is "growing public and private sector support for carbon capture as a critical enabling technology to reduce emissions and help meet society's net-zero ambitions” after it posted stronger-than-expected first quarter earnings of 64 cents a share and $59.15 billion in overall revenues.
"We also made progress on our energy transition strategy by launching our new ExxonMobil Low Carbon Solutions business, which is initially working to develop innovative, large-scale carbon capture and storage (CCS) concepts, including the evaluation and advancement of more than 20 new opportunities, such as a multi-industry hub to reduce emissions from hard-to-decarbonize industries near the Houston Ship Channel," Woods said.