Shares in BP (BP) were higher today despite an investor rebellion at its Annual General Meeting in London over the performance of its board and its now ditched renewable energy strategy.
Lund is Not in Favour
About a quarter of the shareholders of the oil giant voted against the reappointment of Chairman Helge Lund which was the first time in around a decade that over 10% had voted against the person in the top board seat.
Lund is already set to leave the company next year, but the vote could speed up that process. His decision to leave followed intense pressure from activist investor hedge fund Elliott Management, which has in recent months pushed the company to shift its strategy away from renewable energy and back to its traditional ‘bread and butter’ of oil and gas.
Lund was a key backer of BP’s tilt towards becoming a green energy giant, which included an ambition to cut its hydrocarbon output by 40% this decade. However, it share price has suffered dropping over 21% in the last 12 months.
Elliott’s campaign has already been successful in forcing BP to overhaul its green strategy and vow to slash spending on renewable energy projects by 70% and sell $20 billion of assets.
Misplaced Green Ambitions
Lund told shareholders that BP had “pursued too much while looking to build new low-carbon businesses” but that lessons had been learned.
Chief executive Murray Auchincloss, who was more comfortably re-elected said BP’s optimism in the global green energy transition was “misplaced”, and that the board’s goal was to “grow the long-term value of your investment.”
There were, however, a number of protests against the change of strategy both outside the building from activists such as Fossil Free London and inside.
Legal & General, which has a 1.8% stake in the business, said it was “deeply concerned” about BP’s decision to pivot away from renewables, and the lack of a vote on the subject.
Is BP a Good Stock to Buy Now?
On TipRanks, BP has a Hold consensus based on 1 Buy, 8 Hold and 1 Sell rating. Its highest price target is $42. BP stock’s consensus price target is $30.14 implying an 5.61% upside.
