Engine No. 1 Activist Presentation Deck
History of shifting stances instills little confidence
that Board now has a coherent strategy
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Dividend: "XOM's 2Q was arguably the most
interesting of the global majors, not because of
the results, rather the about-face on dividend
commentary. Last quarter, XOM's Chairman &
CEO Darren Woods stated on the call that 'the
beauty of the dividend is its flexible'..."
Priorities: "Compare these two
press releases from ExxonMobil
seven months apart and decide if
the oil giant has a coherent
strategy: April 7, 2020: It's
cutting 2020 capital spending by
30% to about $23 billion. 'The
largest share of the capital
spending reduction will be in the
Permian...""
"Nov. 30, 2020: It's cutting 2021 capital spending to
$16 billion to $19 billion, then raising it to $20 billion to
$25 billion annually through 2025. It ‘will prioritize near-term
capital spending on advantaged assets with the highest
potential future value, including developments in Guyana and
the [Permian Basin] ....' What changed between April, when
the Permian Basin was the focus of investment
reductions, and Nov., when the company said the Permian
Basin was an 'advantaged' asset with 'the highest
potential future value'?”
Metrics: "Good management of this business over time and
across price cycles has to be reflected in solid returns on
capital employed (ROCE)."
"This quarter, SVP Neil Chapman made quite a
different statement that 'a large portion of our
shareholder base has come to view that
dividend as a source of stability in their income
and we take that very seriously""
J.P. Morgan, August 2, 2020
ExxonMobil CEO, Mar. 6, 2019
BusinessWeek, Jan. 26, 2021
"ROCE... within its annual meeting
presentation, ExxonMobil had
dropped the subject."
Sankey Research, Mar. 11, 2021
Sources: Phil Gresh (Aug. 2, 2020). Assessing Implications of 2020-21 Capex Cuts. JP Morgan. Peter Coy (Jan. 26, 2021). ExxonMobil Needs
a Wind-Down Strategy as Oil's Prospects Dim. Bloomberg BusinessWeek. Darren Woods, CEO of ExxonMobil (Mar. 6, 2019). 2019 Investor Day.
Paul Sankey (Mar. 11, 2021). XOM vs. CVX. Sankey Research.
REENERGIZE
EXXON//
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