As shares languish, Crescent Point rolls out option plan for key executives<\/a><\/li>\n<\/ul>\n\u201cCrescent Point has great assets, high netbacks and realizes high prices, and, in our opinion, there is a unique opportunity to unlock shareholder value,\u201d Edmonstone said in an interview Monday. \u201cThey are promoting a lot of value but are not capturing it,\u201d he said, noting the stock trades at lower multiples relative to its peer group and to its net asset value. (The NAV is $24.44; the stock trades at around $9.50.)<\/p>\n
And that huge discount, which translates into a high cost of capital and makes acquisitions difficult, has emerged relatively recently. \u201cIt used to have a low cost of capital, and trade at a high EBITDA multiple, but it has lost that,\u201d said Edmonstone.<\/p>\n
As a result, he said, Crescent Point has \u201can inability to compete,\u201d adding there\u2019s also \u201cconsiderable shareholder dissatisfaction with the board.\u201d<\/p>\n
Cation has proposed four nominees, two of whom, Dallas Howe and Herbert Pinder, are experienced directors. The other two, Edmonstone and Tom Budd, are former investment bankers. Howe was the former chair of the Potash Corp. of Saskatchewan; Pinder is a director of Arc Resources while Budd was the rainmaker at GMP Securities until he retired in 2008. (Budd, Pinder and Edmonstone worked together in 2014 when an activist moved on Renegade Petroleum.)<\/p>\n
If elected, the plan would be to assess operations, governance and management, while exploring debt reduction initiatives and determining if the dividend-plus-growth model is sustainable. \u201cWe would be pushing that agenda,\u201d said Edmonstone.<\/p>\n
Despite the credentials and experience of the four nominees, Crescent Point said Cation, \u201clacks credibility and is engaged in an ill conceived and self serving exercise.\u201d<\/p>\n
But the four nominees have skin in the game: they own 0.3 per cent of Crescent Point, more than twice the stake held by the company\u2019s non-employee directors. According to the circular, the latter group owns 703,143 shares, of which the chairman Peter Bannister owns 568,750 (or more than 80 per cent.) Bannister has been a director since 2003 and chairman since 2005.<\/p>\n
As for executive compensation, all of the company\u2019s five named executive officers received 17 per cent more in 2017 than they did in 2016; meanwhile its total return was down by 46 per cent. \u201cHow does the board gets its mind around increasing NEO compensation with that type of share performance?\u201d asked Edmonstone, when referring to the company\u2019s \u201cunwarranted and undeserved\u201d plan to introduce an \u201cessentially risk free\u201d option plan for executives and senior management.<\/p>\n
That plan, which requires shareholder approval, could see 13 million options granted. (Already 2.988 million options have been granted at $10.06. While $10.06 was the market price at the time of the grant, it\u2019s in a range the shares haven\u2019t traded at since it went public in 2001)<\/p>\n
As for reaction, RBC in a note said while CPG activism has been talked about for years \u201cthis is one of the first public efforts we have seen; Cation is not currently a well know firm but we expect that a view to renew the board would be favorably received by investors.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Cation Capital, a private investment firm, plans to nominate four directors at the upcoming annual meeting of Calgary-based Crescent Point Energy<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/4514"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=4514"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/4514\/revisions"}],"predecessor-version":[{"id":4517,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/4514\/revisions\/4517"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=4514"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=4514"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=4514"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}