Just as EQT Corp. is at odds with remnants of Rice Energy, which it acquired in 2017 and became the U.S.’s largest natural gas producer, independent proxy advisory services firms have now come out on opposite sides of the ongoing proxy battle.
Glass Lewis & Co. said in a report Friday EQT, under its current management and after board changes, was headed in the right direction, Kallanish Energy reports.
Change unwarranted now
It recommended shareholders not support an effort to replace the majority of the board by shareholders Toby and Derek Rice.
“We do not believe further change is warranted at this time given the significant board and management turnover that has already occurred at the Company in the last year, including a new CEO, CFO and COO and eight new directors, representing 75% of the board as proposed on the management slate,” Glass Lewis said, in its report.
“We see no cause for concern with the qualifications or experience of the Management Nominees and find that management and the board are taking appropriate steps to improve operating efficiency at the Company, including identifying material cost savings and delivering favorable performance in the first two quarters with Robert McNally at the helm as CEO.
Unconvinced Rice plan a ‘credible path’
“… we are not convinced the Rice Group plan offers a credible path to achieving material incremental savings above what EQT is already targeting.”
The report is at odds with another proxy advisory firm, Institutional Shareholder Services, which last week recommended investors support all seven Rice nominees. (See story elsewhere in this issue.)
The Rice brothers also have the support of EQT’s fourth and sixth largest shareholders, DE Shaw Group and Kensico Capital Management Corp.
The Rice brothers have been pushing to revamp the board and management, arguing the company has underperformed and is in need of an overhaul.
Back to the future
EQT has argued the Rice brothers want to take the gas producer back to the future by appointing 15 former employees of Rice Energy to management roles. The company has argued their plans would destabilize the business and are unmanageable.
EQT also has said it’s taken steps to refresh its board, replacing nine of its 12 directors since 2017, including three long-tenured ones last month, among them chairman Jim Rohr.
“The recommendation reaffirms that EQT has the right Board, management team and strategy to continue its successful transformation and create significant long-term shareholder value,” the company said, in a statement.
The Rice Team wasn’t immediately available for comment.
More time needed
Glass Lewis said in its report the current leadership should be given more time for its turnaround.
“Ultimately, we believe this contest has placed additional pressure on EQT leadership to deliver operational efficiencies and we believe it would be reasonable for shareholders to provide management and the board with additional time to achieve target savings before seeking further change,” Glass Lewis said, in its report.
This post appeared first on Kallanish Energy News.