Exxon CEO Darren Woods told CNBC on Thursday that the oil giant is engaged in its dividend, even though the company lost more than $ 20 billion in 2020 and while activist investors are pushing for change.
“We will continue to return cash to shareholders through a very strong dividend,” Woods told Squawk Box.
He noted that 2020 was “certainly the worst environment” Exxon has ever faced, as the coronavirus brought global economies to a standstill, reducing fuel demand. At one point, the crude future of West Texas Intermediate plunged into negative territory – an event that many previously considered impossible.
“We had to achieve that balance of continuous investment for the future, continuing to pay a dividend, and we used our balance sheet to retire in these very short periods of time,” Woods said.
Amid the challenges of the past year, Exxon has reduced its capital spending plan and reduced its workforce in an effort to maintain its dividend. The cost-cutting measures meant that 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 among the highest in the S&P 500, making it an attractive bet for investors looking for income.
Woods’ comments came a day after the annual Exxon Investors Day, where the company highlighted its global portfolio, financial capacity and commitment to reducing carbon emissions.
In research reports following investors’ day, Wall Street firms, including Evercore ISI and Bank of America, said they believed the dividend was safe.
Exxon has been under pressure from active investors since at least December, and on Monday the company announced two new board members, including Jeff Ubben, an activist investor and ESG supporter.
The other new board member is Mike Angelakis, president and CEO of Atairos and former chief financial officer of Comcast.
“We’ve been looking for people who have experience and have successful experience in allocating capital, finding value and opportunities, and helping businesses in transition, and I think Jeff and Michael really fit that bill,” Woods said. for “Squawk Box”.
However, Engine no. 1, an activist group targeting Exxon since December, said the board’s new changes are not enough. The company, which includes founders of activist hedge funds such as Partner Fund Management and Jana Partners and has won the support of California pension giant CALSTRS, has nominated its own list of four new directors.
“While ExxonMobil has now recognized the need to change the board, what is missing are executives with diverse successful experience in the energy industry who can position the company for success in a changing world,” Engine No. 1 said on Wednesday.
Exxon shares rose 2.8% on Thursday morning. The stock rose 37% for 2021 to close on Wednesday.
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