Exxon CEO Darren Woods promises a strong dividend despite 2020 losses

Exxon CEO Darren Woods explained to CNBC on Thursday the oil giant is dedicated to its dividend even although the enterprise misplaced a lot more than $20 billion in 2020 and as activist investors thrust for change.

“We’re likely to keep on to return money to shareholders by way of a really robust dividend,” Woods reported on “Squawk Box.”

He mentioned that 2020 was “surely the worst surroundings” that Exxon has at any time faced as the coronavirus introduced world-wide economies to a standstill, sapping demand from customers for fuel. At a person place, West Texas Intermediate crude futures dipped into negative territory — an function that quite a few had earlier believed extremely hard.

“We experienced to strike that harmony of continuing to invest for the long term, continuing to spend a dividend, and we applied our harmony sheet to form of draw down by means of these incredibly reduced periods of time,” Woods reported.

Amid the troubles about the last calendar year, Exxon slashed its funds investing prepare and minimized its workforce in an work to maintain its dividend. The charge-chopping actions meant the firm continued its payout, although Exxon did not raise its dividend in a break with tradition.

The company’s current yield of 6.2% is between the highest in the S&P 500, building it an attractive wager for income-searching for traders.

Woods’ responses came a working day right after Exxon’s once-a-year investor working day, the place the business highlighted its global portfolio, fiscal capacity and dedication to reducing emissions by means of carbon capture.

In investigate studies next the investor working day, Wall Road companies including Evercore ISI and Lender of The usa reported they believe that the dividend is safe and sound.

Exxon has faced force from activist traders because at minimum December, and on Monday the business announced two new board members, like Jeff Ubben, an activist trader and ESG proponent.

The other new board member is Mike Angelakis, chairman and chief executive officer of Atairos and previous CFO of Comcast.

“We had been on the lookout for people that have expertise and a thriving observe file in allocating funds, discovering worth and opportunities and assisting firms changeover, and I think Jeff and Michael seriously match that bill,” Woods informed “Squawk Box.”

Continue to, Engine No. 1, an activist group that’s been targeting Exxon since December, said the new board variations are not ample. The business, which features founders from activist hedge funds these kinds of as Companion Fund Administration and Jana Associates and won the help of California pension huge CALSTRS, has nominated its have slate of four new directors.

“Though ExxonMobil has now conceded the have to have for board modify, what is missing are directors with assorted track documents of achievements in the power field who can situation the Corporation for results in a transforming earth,” Motor No. 1 explained Wednesday.

Exxon shares ended up up 2.8% on Thursday early morning. The stock is up 37% for 2021 as a result of Wednesday’s near.

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