© Reuters. FILE PHOTO: A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018. REUTERS/Sergio Moraes


(Reuters) -Advisory firm Glass Lewis recommended on Monday that Exxon Mobil (NYSE:) shareholders elect two of hedge fund Engine No. 1’s four board nominees in a proxy contest at the largest U.S. oil producer.

Tiny activist fund Engine No. 1 has taken aim at Exxon’s board and its future direction in the first major shareholder contest to make climate change a top issue. The fund has criticized Exxon for poor financial returns and a lagging approach to the transition to lower-carbon energy.

Glass Lewis recommended that shareholders vote for Gregory Goff, former chief executive at oil refiner Andeavor, and Alexander Karsner, a former U.S. Assistant Secretary of Energy for efficiency and renewable energy. The report called electing half of the activist directors “sufficient.”

It is the third proxy advisor to support part or all of Engine No. 1’s slate.

“Electing even a portion of Engine 1’s slate would send a clear message of shareholder dissatisfaction with Exxon’s recent direction and strategy,” Glass Lewis said in its report. It also said Exxon had underperformed peers and its energy transition plan was “generally insufficient and lacking in key areas.”

Exxon and Engine No. 1 could not be immediately reached for comment on Monday.

Proxy advisor Institutional Shareholder Services backed three of the four dissident directors while Pensions & Investment Research Consultants (PIRC) has backed all four Engine No. 1 candidates.

The recommendations are influential for institutional investors and often guide how they vote at corporate meetings. Exxon’s shareholders will vote on May 26.

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