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By Alex
Eule | Wednesday, May 26 New
Energy. Don't let the
tranquil market fool you. It was a seismic day for at least one stock. Exxon
Mobil appears to have lost at least two seats on
its board of directors to activist investor Engine
No. 1. "There's no going back," reads
the headline on Barron's tonight. The
vote opens the door to a new wave of shareholder activism -- and likely
changes the way that energy companies deal with climate
change. Carleton English says the defeat was once
unimaginable. "Less than a decade ago, Exxon was on top of
the world—literally—notching the top spot as the world’s largest company in
2013." But not anymore: Burdened by
a large debt load, a dividend that might be too big for its cash flow, and
continued spending on projects, the company has left itself vulnerable to
both activists pushing for a “net-zero” future and investors unhappy about
how the company is run. Avi Salzman says the ultimate impact of the vote remains
unclear: "The vote appears to be as much about the
underperformance of the stock in recent years as it is about climate change.
And the specifics of how Exxon could change its environmental policies are
just as uncertain as they were before the vote." Exxon shares
were up 1.2% on the day. Read all of our Exxon coverage here. The Dow
Jones Industrial Average -- home to
Exxon Mobil for nearly a century until it was removed last year --
finished the day flat, up just 11 points. It was an
anti-climactic celebration for the Dow, which celebrated its 125th birthday
today. The index has returned 5.5% annually over its life, excluding
dividends (those historical figures seem to have been lost to history).
Here are the 12 original members of the index, when it launched on May 26,
1896: American Cotton Oil, American Sugar, American Tobacco, Chicago Gas,
Distilling and Cattle Feeding, General Electric, Laclede Gas, National Lead,
North American, Tennessee Coal & Iron, U.S. Leather, and U.S. Rubber. |
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DJIA: +0.03% to 34,323.05 The Hot
Stock: Ford Motor +8.5% Best Sector:
Communication Services +1.0% |
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