TotalEnergies, one of the world’s energy giants, is preparing for a tense Annual General Meeting on May 24. The Group urged its shareholders to vote in support of its strategy and to renew the terms of office of its CEO, Patrick Pouyanné, and of its lead director, Jacques Aschenbroich. This request comes at a time when certain activists are seeking to challenge this governance.
TotalEnergies’ financial performance and strategy
Since the end of 2020, TotalEnergies ‘ share price has doubled from nearly 35 euros to 66 euros. What’s more, the Group’s dividend has risen by 30% since 2015 and has never fallen in over forty years. These results are put forward by the Group to justify the renewal of the current management and the strategy pursued.
Opposition from activist shareholders
A coalition of shareholders, led by the Ethos Foundation, has tabled a resolution to separate the functions of Chairman and CEO. This initiative is supported by international investors such as Achmea Investment Management, Candriam and AP7, who are critical of the company’s current governance. The resolution proposes to retain Patrick Pouyanné as CEO, but the Board of Directors unanimously rejected the inclusion of this text on the agenda.
External pressure and legal hearings
The refusal to include the resolution led to a hearing in the Commercial Court. Meanwhile, Ofi Invest Asset Management has circulated letters from a group of 16 international investors calling on six major European oil companies, including TotalEnergies, to stop expanding fossil fuels and increase investment in renewable energies. These investors announced that they would vote against certain strategic resolutions and the re-election of the chairmen of the boards of TotalEnergies, Shell and BP.
Climate strategy and governance
The letter to Patrick Pouyanné criticizes TotalEnergies’ inadequate climate strategy and calls for greater responsibility on the part of the Chairman of the Board. Investors insist on the need to redirect investments towards more sustainable energies and to strengthen the Group’s environmental commitments.
TotalEnergies has to juggle solid financial results with growing pressure to adopt more environmentally-friendly strategies. The outcome of the AGM could have significant repercussions on the Group’s governance and its climate roadmap.
