As shares languish, Crescent Point rolls out option plan for key executives<\/a><\/li>\n<\/ul>\nSkin in the game \u2014 the four Cation nominees own about 0.30 per cent of the outstanding shares \u2014 apparently doesn\u2019t rank highly with ISS.<\/p>\n
Those recommendations were made after ISS said the dissident \u201chas made a reasonably compelling case for some change to the incumbent board to facilitate improvements to capital allocation decisions, to enhance profitability and to ensure appropriate alignment of executive compensation.\u201d<\/p>\n
The battle at Crescent Point comes as the company\u2019s share price has underperformed its peers over the past one, three and five-year periods. Since Jan. 1 2013, Crescent Point\u2019s share price is down by almost 80 per cent.<\/p>\n
So how bad does it have to get before the proxy advisory firm recommends shareholders do a straight swap \u2014 in with the four nominees advanced by the dissident and out with four company nominees?<\/p>\n
ISS\u2019s split recommendation seems unusual given that its policy does not require \u201ca detailed plan\u201d when dissidents seek a minority of the board seats.<\/p>\n
The proxy firm says shareholders should support two dissidents (Dallas Howe and Herbert Pinder) \u201cwho have considerable and relevant board experience.\u201d It also recommends shareholders withhold their votes for two of the company\u2019s nominees: Mike Jackson (chair of the compensation committee) and Rene Amirault (chief executive of Secure Energy Services. In 2017, Crescent Point paid Secure $12.9 million \u201cin the normal course of business.\u201d)<\/p>\n
ISS said Amirault is a \u201cnon-independent board member,\u201d while Jackson \u201clacks prior board experience and not does not appear to possess substantial relevant experience in the industry.\u201d<\/p>\n
Maybe ISS was swayed by the ratio between the board seats demanded and the size of the board (in this case the dissidents wanted 40 per cent) because throughout the report it points out many instances in which the board hasn\u2019t done a proper job in overseeing management.<\/p>\n
For example: Over the past three plus years, Crescent Point has lost its premium valuation, a lower multiple ISS said \u201cseems to point to the market\u2019s doubts regarding effectiveness of the company\u2019s capex program.\u201d<\/p>\n
In addition, Crescent Point\u2019s costs are also higher than those of its peers. \u201cThe company\u2019s operating performance shows that at the SG&A level it has not participated in the industry wide cost-cutting efforts to the same degree as peers. Its stock performance, on the other hand, might be reflective of market doubts on capital allocation and leverage.\u201d<\/p>\n
And that leverage is more than 20 per cent greater than that of its peers. \u201cIn hindsight the route chosen by the company to fund its capex program may have been an additional factor playing against its stock price.\u201d<\/p>\n
For good measure, ISS noted, in terms of corporate governance, \u201cit does not appear\u201d the nominees added over the last few years \u201chave been ideal choices in terms of improving board oversight.\u201d<\/p>\n
Apart from that the board has done a wonderful job.<\/p>\n
Finally, ISS also recommended shareholders vote against the \u201csay on pay\u201d motion, in part because the \u201csignificant underperformance that was not reflected in the CEO\u2019s total compensation.\u201d<\/p>\n
Financial Post<\/em><\/p>\nbcritchley@postmedia.com<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"ISS recommends shareholders should support just two of the four nominees advanced by the dissident shareholder Cation Capital<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"open","ping_status":"open","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\/6797"}],"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=6797"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/6797\/revisions"}],"predecessor-version":[{"id":6798,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/6797\/revisions\/6798"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=6797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=6797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=6797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}