Our Letter to Exxon

Via Email and Overnight Mail

November 1, 2022

RE: Meeting with Strive Regarding Board Composition

Dear Mr. Morford,

I am Executive Chairman of Strive Asset Management, currently a shareholder of ExxonMobil. I write to request a meeting with ExxonMobil CEO Darren Woods to discuss the composition of its board of directors.

Strive is a new asset management firm whose mission is to restore the voices of everyday citizens in the American economy. We deliver a shareholder mandate to our portfolio companies to focus exclusively on delivering excellent products and services to customers in a manner that maximizes long-run shareholder value, without regard to sociopolitical objectives or other mixed motivations.

We applaud the company’s recent financial results and believe that Exxon must position itself for continued long-run success. We write to express our concern about a potential imbalance of viewpoints represented on Exxon’s board of directors which we believe creates potential long-run risks for the company. You are a great American oil company, and we worry that – following the activist shareholder-led campaign in 2021 to appoint three dissident directors – your current board reflects an overrepresentation of directors whose principal focus appears to be on Exxon’s climate change strategy.

While climate change is one of many factors that may influence decision-making at Exxon, we are concerned that singularly focusing on this risk factor at the expense of other considerations creates new long-run risks – including the very real risk of underinvesting in fossil fuels to match global demand. The growing supply-demand imbalance for global energy is itself in part the result of undue social pressure on U.S. fossil fuel producers to reduce production in preparation for a “green energy transition.” We are concerned that these socially motivated mandates, however well-intentioned, may cause Exxon to miss opportunities to realize value by meeting growing demand for fossil fuels. We do not believe that the choice is binary: we support Exxon’s investments in new energy areas where it enjoys competitive advantages, so long as the company does not sacrifice value-creating opportunities in its core oil-and-gas business to do so.

We hope to be part of the solution. Strive has identified potential board candidates who may help improve governance and long-run capital allocation by restoring balance in your boardroom. We are open to discussing these candidates at your convenience and believe that now is a good time to potentially add one of them to your board: Exxon can act from a position of strength rather than weakness.

Our preference is to work collaboratively with you to add one of these directors to your board, rather than to run a traditional proxy contest which can be expensive, time-consuming, and distracting for all parties. You know this better than most based on your 2021 experience. However, we are willing to take that step if necessary and believe we would enjoy broad support from large asset allocators including certain state pension funds and from thousands of individual investors: we expect strong public enthusiasm for our nominees.

Our goal is to help you strengthen your board in a collaborative manner. We would like to meet with Mr. Woods in early November to discuss these issues and to explore the possibility of adding a suitable director to your board ahead of preparations for next spring’s proxy voting season.

I will be in Texas early next week if your team’s schedule permits, or else we can explore alternative dates to visit your headquarters. Thank you for your response.