(Reuters) – Proxy adviser Glass Lewis & Co has recommended that investors in natural gas producer EQT Corp vote in favor of the company’s board nominees, putting it at odds with another proxy advisory firm which recommended voting in favor of a competing slate of directors proposed by Toby and Derek Rice.
Toby Rice, co-founder of Rice Energy group, speaks during an interview in New York, U.S., June 11, 2019. REUTERS/Brendan McDermid
“We see no significant outstanding concerns regarding leadership or governance at EQT and we do not believe further board refreshment or oversight is warranted at this juncture,” Glass Lewis said in a note dated June 28.
The recommendation by Glass Lewis to vote in favor of all 12 of the company’s nominees comes after proxy advisory firm Institutional Shareholder Services on Friday advised EQT investors to vote in favor of all the nominees of shareholders Toby and Derek Rice.
The Rice brothers were part of the founding team at Rice Energy, which was bought by EQT in November 2017. They say EQT management is responsible for the company’s underperformance since the deal, and have pushed for an overhaul of its board.
EQT welcomed Glass Lewis’ recommendation and said it reaffirmed that the company has the right board, management team and strategy to create significant long-term shareholder value.
“EQT believes shareholders should question the merit of a 3% shareholder seeking to be CEO and replace management and a majority of the board,” the company said in a statement.
Glass Lewis also said management should be given a reasonable amount of time by the shareholders to achieve targets before seeking further changes.
ISS in its report had recommended that EQT shareholders should support all seven nominees put forward by the Rice brothers and five existing members of the board, sending the company’s shares higher.
The Rice brothers also have the support of EQT’s fourth and sixth largest shareholders, DE Shaw Group and Kensico Capital Management Corp.
EQT disagreed with ISS’s recommendations and said the Rice nominees were less qualified, less experienced and conflicted.
“We are grateful to those large shareholders who have publicly announced their support for all Rice team nominees,” the Rice team said, adding it believed the Friday’s stock market reaction to the ISS announcement spoke for itself.
Reporting by Ishita Palli and Bhargav Acharya in Bengaluru; Editing by Bill Rigby and Jonathan Oatis