July 12, 2019

Universal Proxies: Understanding the Difference Between EQT & SandRidge Energy

Yesterday, I blogged about how a dissident group won control of EQT’s board through a proxy fight that was waged using a universal proxy card. According to this Olshan memo, this marked the first time that such a card was successfully used in a control proxy contest in the US.

In the wake of the blog, a member asked this in our “Q&A Forum” (#9949):

In today’s blog, it says it’s the first time a dissident won control of a company’s board after a proxy fight using a universal proxy card. What about SandRidge Energy last year? SandRidge was considered the first company in the U.S. to let an activist board nominee onto its ballot. I didn’t follow that proxy fight very closely, but thought Carl Icahn ended up taking over SandRidge’s board.

After conferring with Andrew Freedman of Olshan, I provided this response:

Yes, there actually is a big distinction. SandRidge used a universal proxy, but Icahn could not. It relates back to the issue that Olshan covers in their alert about how company counsel is using advance notice bylaws and/or director nominee questionnaires to extract “consents” from dissident nominees, while not agreeing to provide reciprocal consents for the Company’s nominees to the dissident. Thereby creating a one-way advantage for the company to use a universal proxy card – while the dissident is left with a card that can only name the dissident’s nominees. The Rice Team & Olshan didn’t let EQT get away with that – they went to court.

The Challenges of Disclosing a CEO’s Illness

Over the years, I have blogged numerous times about the challenges of disclosing an illness for a senior executive (see this blog – and this blog). My good friend Bob Lamm delves into this sensitive topic in this blog about some recent CEO illnesses and the related disclosures…

Abigail Disney’s “Mini-Crusade” Against Disney’s Pay Ratio

Following up on this blog that I wrote on, here’s a note from Anders Melin’s “The Pay Letter”:

I was out hiking in Laguna Beach the day Abigail Disney began her mini-crusade against Disney’s CEO pay ratio of 1,424-to-1. She laid it all out in a bunch of tweets. “Jesus Christ himself isn’t worth 500 times median workers’ pay,” she had said just weeks earlier.

Supporters and critics quickly jumped into their respective trenches. The former decried capitalism. The latter brushed off her remarks as socialist propaganda. (I exaggerate, but you get the point.)

Among her critics was Jeff Sonnenfeld, the ever-present Yale management professor. He pointed to Disney’s 580% stock return under Iger and the 70,000 jobs it’s created, and that the CEO’s pay still pales in comparison to that of some hedge fund managers, who don’t really create anything. “When pay and performance is properly aligned as it is at Disney, we need to recognize it,” he wrote.

What most of Abigail’s critics, including Sonnenfeld himself, failed to grasp was her actual point: That the wealth Disney’s created hasn’t been shared equitably with most of its employees.

In her lengthy series of tweets, she took a swipe at the shareholder-centric model of running companies and the consequences that sometimes follow for workers, the environment and surrounding communities. “When does the growing pie feed the people at the bottom?” she rhetorically asked the universe.

This question about what’s a fair sharing ratio — how much of the monetary gains of a successful company should be reaped by the single person in charge — is something I will explore in a series of stories later this year. (A sneak peek would be my piece from April about the CEO of a tiny California bank who took home twice as much as Jamie Dimon last year.)

Broc Romanek