Engine No. 1, the activist firm that gained three board seats at Exxon Mobil after months of targeting the oil giant, may have focused its campaign on climate, but Bank of America believes shareholders who voted in favor of the board shake-up were likely focused on one thing: the dividend.
And following aggressive cost-cutting measures and a rebound in oil prices, the firm believes Exxon is set to hike its shareholder payout before the end of the year.
“From our discussions with investors, dividend surety and balance sheet integrity perceived to have been put under unnecessary stress in 2020 seemingly was the catalyst for the adverse shareholder vote,” the firm said late Monday in a note to clients while reiterating its buy rating on the stock.
