Exxon CEO Darren Woods emphasized the oil giant’s commitment to its dividend after the company lost more than $ 20 billion in 2020 and when activist investors pushed for change.
“We will continue to return cash to shareholders through a very strong dividend,” Woods said Thursday on CNBC’s “Squawk Box”.
He noted that 2020 was “arguably the worst environment” Exxon has ever faced, as the coronavirus stopped global economies and minimized fuel demand. At one point, West Texas Intermediate’s future futures plunged into negative territory, a fact that many had previously believed impossible.
“We had to look for that balance of continuing to invest for the future, continuing to pay a dividend, and we used our balance sheet to reduce those very low time periods,” Woods said.
Amid last year’s challenges, Exxon cut its capital spending plan and downsized its workforce in an effort to preserve its dividend. Cost-cutting measures meant the company continued to pay, although Exxon did not increase its dividend by breaking with tradition.
The company’s current yield of 6.2% is one of the highest in the S&P 500, making it an attractive bet for income-seeking investors.
Woods ’comments follow Exxon’s annual Investor Day, which was held virtually Wednesday. Among other things, the company highlighted its global portfolio, financial capability and commitment to reducing emissions through carbon capture.
In post-day investor research reports, Wall Street companies, including Evercore ISI and Bank of America, said they believe the dividend is safe.
Exxon has faced pressure from activist investors since at least December and on Monday the company announced two new board members, including Jeff Ubben, an activist investor and ESG advocate.
The other new board member is Mike Angelakis, president and CEO of Atairos and former chief financial officer of Comcast.
“We were looking for people who had experience and a track record of allocating capital, finding value and opportunities, and helping companies transition, and I think Jeff and Michael really fit into this bill,” Woods said. a “Squawk Box”.
Still, Engine No. 1, an activist group that has been heading to Exxon since December, said changes to the new board seats are not enough. The company, which includes activist hedge fund founders, including Management Fund and Jana Partners, and which won the support of California pension giant CALSTRS, has named its own list of four new directors.
“While ExxonMobil has now acknowledged the need to change the board of directors, what is missing are executives with a diverse track record of success in the energy industry who can position the company to succeed in a changing world,” he said. engine number 1 in a statement Wednesday.
Exxon shares were more than 1% higher when the market opened on Thursday. Shares are up 37% for 2021 through Wednesday’s close.
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