Exxon CEO Darren Woods told CNBC on Thursday that the oil giant is committed to its dividend, even as the company lost more than $ 20 billion in 2020 and as activist investors push for change.
“We will continue to return cash to shareholders through a very strong dividend,” Woods said of “Squawk Box.”
He noted that 2020 was “certainly the worst environment” Exxon has ever faced, as the coronavirus brought global economies to a halt and stifled fuel demand. At one point, the West Texas Intermediate crude oil futures plunged into negative territory – an event many previously thought impossible.
“We had to find that balance by continuing to invest for the future, continuing to pay dividends, and we used our balance sheet to get through these very low periods,” Woods said.
Amid the challenges of the past year, Exxon has reduced its investment plan and reduced its workforce in an effort to maintain its dividend. The cost-cutting measures kept the company paying, although Exxon did not increase its dividend in a break with tradition.
The company’s current return 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 Exxon’s annual investor day, where the company highlighted its global portfolio, financial capabilities and commitment to reducing emissions through carbon capture.
In post-investor day investigative 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, chairman and CEO of Atairos and former CFO of Comcast.
“We were looking for people with experience and a successful track record in allocating capital, finding value and opportunity, and helping companies transition, and I think Jeff and Michael really fit that bill,” Woods told “Squawk Box.”
Still, Engine No. 1, an activist group that has targeted Exxon since December, that the new board changes are not enough. The company, which includes founders of activist hedge funds such as Partner Fund Management and Jana Partners and has the backing of California retirement giant CALSTRS, has put forward its own list of four new directors.
“While ExxonMobil has now recognized the need for board changes, it lacks executives with diverse achievements in the energy industry who can position the company for success in a changing world,” said Engine No. 1 Wednesday.
Exxon shares were up 2.8% Thursday morning. The stock is up 37% for 2021 through Wednesday’s close.
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