Energy Insights

Controlling Activist Investors

Potential Texas legislation would curtail activist investors and proxy advisors.

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While we wait to see what deregulation might come out of the new administration regarding Dodd-Frank or other executive compensation regulations, the Texas legislature might take a huge step in favor of corporate boards and management. A bill currently pending…

ISS’s Say on Pay Vote Recommendations Surprisingly Similar to Last Year

Some experts expected more "against" votes for the energy industry this year, but that did not come to fruition.

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Heading into this recently past proxy season, experts speculated that ISS might recommend “against” say on pay proposals among the energy industry at a higher rate compared to last year assuming the dramatic decline in stock prices, driven by the…

Compensation When Oil is in the $40’s

With oil prices in the $40 per-barrel range, this creates an entirely new environment for oil and gas compensation decisions. Meridian analyzes the themes and realities for 2015.

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Oil prices in the $40s create an entirely new environment for oil and gas compensation decisions this year. From our vantage point across the industry we’ve noted several important themes and realities: Situations differ. Low prices impact everyone, but some…

The Line Between Ownership and Compensation

Cheniere Energy’s recent challenges offer interesting lessons in understanding the differences between “ownership” and “compensation”.

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Cheniere Energy’s recent challenges offer interesting lessons in understanding the differences between “ownership” and “compensation”. Cheniere has faced notable public challenges to its executive compensation program, including the withdrawal of an incentive plan proposal to shareholders and failed Say on…

The End of Deferred Compensation?

Proposed Legislation Could Render the Tax Saving Effectiveness of Deferred Compensation Inert

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Our last post introduced some thoughts around proposed legislation by the Republican Chair of the House Ways and Means Committee that would effectively end tax deductibility of compensation under IRC Section 162(m). I’d like to explore the other aspect of…

Shareholders Will Likely Feel the Pain of Proposed Tax Reforms

Changes Intended to Address Executive Compensation Will Likely Have a Larger Effect on Shareholders

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As noted in a recent Meridian Client Update, a comprehensive draft proposal to reform the Internal Revenue Code (IRC) was released in February by the Chairman of the House Ways and Means Committee. Among the proposed reforms is the elimination…

Oil & Gas Industry Outside Director Compensation Trends

Meridian Analyzed 16 Oil and Gas Companies to Determine Key Themes in Compensation

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There have been a number of studies released recently on the topic of outside director compensation, covering practices across industries. In this posting, we’ll dig deeper into outside director compensation practices within the oil & gas industry. Meridian recently analyzed…

Questioning Total Shareholder Return

While Total Shareholder Return is Under Scrutiny, it Remains the Best Metric to Evaluate Performance

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Relative Total Shareholder Return (TSR) has become the most common performance metric in long-term incentive plans across the energy industry. TSR is also the primary metric used by shareholders and proxy advisors like ISS to evaluate performance and test the…

Investors Still Don’t Give Boards High Marks on Executive Compensation

In a Survey Investors Expressed Their Lack Of Trust in Board for Executive Compensation Decisions

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A recent PricewaterhouseCoopers (PwC) survey found that two-thirds of institutional investors don’t think that corporate boards are effective in controlling executive compensation. The PwC survey results imply that despite on average receiving over 90% shareholder support for Say on Pay,…

Changing the Role of Proxy Disclosures

With Rules Changing Companies Have an Opportunity to Focus on Disclosure Improvements

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The recent release of the SEC’s proposed rules on CEO Pay Ratio disclosure has everybody thinking about preparation of their proxy disclosures. While changes required under these proposed rules likely won’t be in effect until the 2016 proxy season, there…

Stock Options—Too early to administer last rites?

Companies are Gradually Doing Away with Stock Options in Favor Of Performance Shares

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In a recent Wall Street Journal article “Last Gasp for Stock Options?” the author takes a pretty grim view on the future of stock options. Is this really a bold new claim or is it old news? To be sure,…

Changing the Guard

Five Potential Trends From Energy Leadership Adjustments

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Energy companies have hired or promoted a spate of new CEOs, with a dozen or more new incumbents or openings in the upstream sector alone. What compensation and governance trends might this concentrated wave of new leadership create over the…

2013 ISS Recommendation Trends

ISS Recommendations for the Energy Industry are Looking Up This Year with Fewer Against Votes Than Last Year

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We’re about midway through the 2013 proxy season and so far, the energy industry is faring better than last year with ISS. 12% of energy companies have received a Say on Pay AGAINST recommendation from ISS this year as opposed…

What Do This Year’s Bonus Payouts Look Like?

CEO Payouts for Energy Companies in the S&P 500 Varied Considerably

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This is a question we hear frequently this time of year — and now that many of the 2013 proxy statements have been filed, we thought we’d share our insights on CEO bonus payouts. We focused on S&P 500 CEOs…

What to Learn from Shareholder Activism

A Review of Recent Shareholder Activism in the Energy Industry

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Energy boards and management have paid close attention to activist shareholders this proxy season, including current proxy battles and investor activism at Hess Corporation (Elliott Associates), SandRidge Energy (TPG-Axon Capital) and Nabors (Pamplona Capital). Each has included a discussion of…