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It’s important to realize a major reason they won is because existing shareholders were kind of miffed at the board for a while. The board didn’t really engage

It’s important to realize a major reason they won is because existing shareholders were kind of miffed at the board for a while. The board didn’t really engage with shareholders very much if they could help it, and there weren’t actually any energy industry experts on it, shocking for a company named Exxon. Even Vanguard, hardly a hotbed of investment-as-activism, voted for two of the Engine candidates: > “Over the years, we have shared with Exxon our concerns about the lack of energy sector expertise in its boardroom and questions about board independence. And for years, we did not witness sufficient progress on either front.” (Source: the WSJ write up at https://www.wsj.com/articles/investors-give-exxon-payback-for-frustrations-on-strategy-and-climate-11622227480 https://www.wsj.com/articles/investors-give-exxon-payback-fo... )

dragontamer 5y ago
Because the balance of power was thought to be against the shareholders and for the Exxon board. Before this moment, how could Vanguard / Blackrock convince Exxon Board members to invest into renewable technologies? 1. No "activist investor" has ever done something like this before. So the status-quo is very much a surprise to pretty much everyone involved. Before these two new board members were elected, it was more or less considered impossible for them to be elected. 2. Vanguard / Blackrock cannot sell their shares, because they're index fund companies. So the #1 way of exerting control over the board (aka: "leaving" as an investor) is gone. These large companies are basically "permanent" shareholders, because they are primarily holding retirement money. 3. Board members typically run unopposed. So there's no other person to vote against. ---------------- Ultimately, it goes to show that becoming an "activist investor", even with very very small amounts of money, can become very powerful if you convince Vanguard / Blackrock that you're doing the right thing. It shows that large ETF companies can in fact, exert control over the board. They are no longer "passive" investors, but active ones who think about the betterment of... something? Its not quite clear what Vanguard / Blackrock is thinking (The concepts of "ESG" investing are only beginning)
- z3ncyberpunk 5y ago
  Is this supposed to be what trust fund brats think is drama?
- miohtama 5y ago
  What are the rules of choosing board members in US publicly listed companies? Why board members typically run unopposed?

dragontamer 5y ago

Because the balance of power was thought to be against the shareholders and for the Exxon board. Before this moment, how could Vanguard / Blackrock convince Exxon Board members to invest into renewable technologies? 1. No "activist investor" has ever done something like this before. So the status-quo is very much a surprise to pretty much everyone involved. Before these two new board members were elected, it was more or less considered impossible for them to be elected. 2. Vanguard / Blackrock cannot sell their shares, because they're index fund companies. So the #1 way of exerting control over the board (aka: "leaving" as an investor) is gone. These large companies are basically "permanent" shareholders, because they are primarily holding retirement money. 3. Board members typically run unopposed. So there's no other person to vote against. ---------------- Ultimately, it goes to show that becoming an "activist investor", even with very very small amounts of money, can become very powerful if you convince Vanguard / Blackrock that you're doing the right thing. It shows that large ETF companies can in fact, exert control over the board. They are no longer "passive" investors, but active ones who think about the betterment of... something? Its not quite clear what Vanguard / Blackrock is thinking (The concepts of "ESG" investing are only beginning)

z3ncyberpunk 5y ago
Is this supposed to be what trust fund brats think is drama?
miohtama 5y ago
What are the rules of choosing board members in US publicly listed companies? Why board members typically run unopposed?