Valero Energy Corp. declared a quarterly cash dividend of $1.02 per common share on Tuesday, the same as last year.
“The dividend will be paid on June 22, 2023 to holders of record at the close of business on May 23, 2023,” it said in a press release.
Its board of directors raised the previous quarterly cash dividend from $0.98.
The US fuel and petrochemicals producer on April 27 reported net income of $3.146 billion in the first quarter, more than three times higher than in January-March 2022, but down from $3.232 billion of the last three months of 2022.
Valero closed up 0.95 percent at $108.4 on the New York Stock Exchange on Tuesday.
New Chief
In another press release on the same day, Valero said that Joseph Gorder has stepped down as CEO but won the election to be executive chairman of the board, both effective June 30. as well as a board member.
“In addition to his current position, Mr. Riggs has held various leadership positions with Valero overseeing refining operations, crude and feedstock supply, and planning and economics,” the company said. “Mr. Riggs also served on the board of directors of Valero Energy Partners GP LLC (the general partner of Valero Energy Partners LP (NYSE: VLP)) from 2014 to 2019.”
Riggs said: “The principles of Valero’s strategy: Pursue operational excellence, deploy capital with an uncompromising focus on returns, and honor our commitment to shareholders, which have been in place for nearly a decade under Joe’s. [Gordner] leadership will remain a constant and will continue to position us well for the future”.
Issue target queue
The announcement named Robert Profusek as lead independent director, despite opposition from shareholders who urged the company to redact its emissions reduction roadmap.
Miller/Howard Investments Inc. called on fellow investors to push for a review of the climate plan, in a filing with the US Securities and Exchange Commission (SEC) on Monday, the company’s annual meeting schedule. He also called for support for the request of shareholder Mercy Investment Services Inc. against the election of director candidates Profusek, Deborah Majoras and Rayford Wilkins.
“Miller/Howard Investments, Inc. is concerned that the company’s lack of robust and comprehensive greenhouse gas targets, in contrast to peers such as Phillips 66 and Marathon Petroleum Corporation, raises questions about its strategy and their preparation for a low-carbon future,” Miller. /Howard Investments said.
Valero has not submitted any response.
Last month, Mercy Investment Services urged Valero’s other shareholders to vote against the three at Valero’s annual meeting because of the board’s “inadequate oversight of the company’s unique climate-related risks and opportunities.” as stated in a letter from Mercy Investment Services filed by Valero with the SEC on April 24.
Mercy Investment Services has argued that Valero’s greenhouse gas (GHG) reduction framework is below industry standards.
“For example, in its 2035 GHG reduction target, Valero uses the low carbon profile of its biofuel products to offset its scope 1 and 2 emissions. Instead, the appropriate protocol would classify emissions of biofuels from Valero as Scope 3 product emissions,” the letter said. “While we do not dispute that Valero’s biofuels are lower in carbon than their fossil fuel products, accepted protocols simply do not allow for this type of trade-off.”
The non-governmental organization World Resources Institute, which initiated the grouping of emissions from three domains in a GHG protocol accounting guideline published in September 2001, defines domain I as direct emissions that “occur from from sources owned or controlled by the company,” as stated in its revised GHG accounting standard published in March 2004. Scope II refers to emissions from electricity purchased by a company and that “occur at the facility where electricity is generated.” Scope III emissions come from “the extraction and production of purchased materials; transport of purchased fuels; and use of the products and services sold”.
The United Nations Framework Convention on Climate Change has put direct energy consumption under scope I. Its scope II covers the emissions derived from the purchase of electricity, heat and steam. Scope III under the agency’s definitions lists business travel via flights and public transportation, among others.
In its GHG reduction plan published in September 2022, Valero only covers emissions from its refineries. It plans to “reduce and shift” 100 percent of its refinery’s Scope I and II emissions by 2025 “through Board-approved projects and carbon sequestration projects under development.”
Mercy Investment Services said in an earlier letter as published by Valero on March 22 with the SEC: “While Valero has adopted near-term GHG reduction targets, it does not offer a robust decarbonization plan that ensures a model of resilient business through the energy transition, exposing the company to reputational, regulatory and transition risks.Valero’s climate action plan includes minimum reductions in absolute emissions and excessive reliance on “displaced emissions” unverified without any reduction targets or actions associated with scope 3 emissions”.
Valero in that disclosure said Mercy Investment Services’ call for changes to reduction targets resulted in refinery closures. “Our strategy, on the other hand, is to manage the most resilient refining assets, increase our production of low-carbon fuels and achieve our aggressive targets by leveraging resilience and our low-carbon growth strategy,” he said, adding the appeal. had been rejected at its 2022 annual meeting.
On Scope III, Valero said no goals have been set “because the methodology is fraught with duplication and other challenges, and we don’t have a clear line of sight on the use of our products by third parties.”
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