Billionaire activist investor Carl Icahn’s effort to shake up Occidental Petroleum’s board got a boost from a prominent shareholder advisory firm Thursday, Kallanish Energy learns.
Institutional Shareholder Services urged the producer’s investors to support Icahn’s initial steps in his push to replace four directors. Doing so would also allow shareholders to have a voice on how the company handled its $38 billion agreement to buy Anadarko Petroleum.
Occidental has argued Icahn’s proposals divert attention at a pivotal point in the company’s history, Bloomberg reported. While that’s important, it’s equally important for shareholders to determine whether “this is a board that has adopted a parental ’I know best’ attitude,” ISS said.
Icahn told Bloomberg Thursday he’as been “extremely encouraged” by the number of shareholders who have spoken out about their concerns over the way the company has acted since he went public with his campaign. He said he was “very pleased” with the ISS report.
“The company has made statements that I am disruptive in the boardroom,” he said. “I believe my own record over the past 30 years completely proves the fact that this another disingenuous statement by the company.”
He has consistently delivered strong results by holding executives and boards accountable when they have shown an inability to manage, he said.
Icahn is seeking to replace Occidental chairman Eugene Batchelder and three other directors over concerns about the Anadarko deal not being subject to a shareholder vote.
He also doesn’t like the $10 billion in financing the company has agreed to take from Warren Buffett’s Berkshire Hathaway to help finance the deal.
Right now, Occidental’s bylaws make it difficult for Icahn to rally enough support from shareholders to call a special meeting to even consider his proposals. So he’s taking a different approach.
The first step in that process: getting 20% of shareholders to ask Occidental’s board to set a record date for determining which investors would be allowed to vote on the matter. ISS supports that, though the advisory firm said that doesn’t imply it supports Icahn’s nominees or proposed changes at this point, Bloomberg reported.
If Icahn wins the necessary support, he said he would seek to replace the directors through written consent.
Occidental said it disagreed with ISS’s recommendation to support the first step and only later focus on whether Icahn’s proposal would harm or further shareholder interests.
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