Exxon CEO Darren Woods advised CNBC on Thursday the oil big is dedicated to its dividend although the corporate misplaced greater than $20 billion
Exxon CEO Darren Woods advised CNBC on Thursday the oil big is dedicated to its dividend although the corporate misplaced greater than $20 billion in 2020 and as activist buyers push for change.
“We’ll proceed to return money to shareholders by means of a really robust dividend,” Woods mentioned on “Squawk Field.”
He famous that 2020 was “definitely the worst surroundings” that Exxon has ever confronted because the coronavirus introduced international economies to a standstill, sapping demand for gas. At one level, West Texas Intermediate crude futures dipped into unfavorable territory — an occasion that many had beforehand thought inconceivable.
“We needed to strike that steadiness of constant to take a position for the longer term, persevering with to pay a dividend, and we used our steadiness sheet to form of draw down by means of these very low intervals of time,” Woods mentioned.
Amid the challenges over the past 12 months, Exxon slashed its capital spending plan and lowered its workforce in an effort to protect its dividend. The price-cutting measures meant the corporate continued its payout, though Exxon did not elevate its dividend in a break with custom.
The corporate’s present yield of 6.2% is among the many highest within the S&P 500, making it a sexy wager for income-seeking buyers.
Woods’ feedback got here a day after Exxon’s annual investor day, the place the corporate highlighted its international portfolio, monetary functionality and dedication to decreasing emissions by means of carbon seize.
In analysis studies following the investor day, Wall Avenue companies together with Evercore ISI and Financial institution of America mentioned they consider the dividend is protected.
Exxon has confronted stress from activist buyers since not less than December, and on Monday the corporate introduced two new board members, together with Jeff Ubben, an activist investor and ESG proponent.
The opposite new board member is Mike Angelakis, chairman and chief government officer of Atairos and former CFO of Comcast.
“We have been searching for those that have expertise and a profitable monitor file in allocating capital, discovering worth and alternatives and serving to companies transition, and I believe Jeff and Michael actually match that invoice,” Woods advised “Squawk Field.”
Nonetheless, Engine No. 1, an activist group that is been focusing on Exxon since December, mentioned the brand new board modifications will not be sufficient. The agency, which incorporates founders from activist hedge funds similar to Companion Fund Administration and Jana Companions and gained the help of California pension big CALSTRS, has nominated its personal slate of 4 new administrators.
“Whereas ExxonMobil has now conceded the necessity for board change, what’s lacking are administrators with numerous monitor data of success within the vitality business who can place the Firm for achievement in a altering world,” Engine No. 1 mentioned Wednesday.
Exxon shares have been up 2.8% on Thursday morning. The inventory is up 37% for 2021 by means of Wednesday’s shut.
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