This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Energy Companies Are Exhibit A in Shareholder-Rights Battle

"When we see that type of performance and the compensation awarded to executives, there is a strong disconnect there," Illinois' Atwood says. "As a public fund investor, it's generally our position to be critical of compensation levels in corporate America, but when we have extreme compensation juxtaposed against abysmal stock performance, we just feel duty-bound to raise hell."

The tale of Nabors during the reign of Isenberg hit a crescendo right before his retirement late last year, when he was awarded a $100 million "contingent liability" payment, a retirement check Isenberg ultimately gave back after public outcry. The Nabors board contends in its annual meeting proxy filing that it "negotiated" the termination of Isenberg's retirement payment and has brought down compensation over a period of consecutive years.

Atwood is nonplussed. "It's hard to find a case as egregious as this one," he says. "Shareholders weren't protected by the board. Whatever motivated him [Isenberg], shareholders should not have been in that situation in the first place."

For the pension funds, none of these are easy battles to win. Shareholders typically vote their proxies the way the board instructs them to.

A pension official who is involved in both battles said Nabors' recommendations in its annual meeting proxy were, in the least, reasoned attempts to persuade shareholders to reject the proposals. Chesapeake's proxy language, though -- not yet released but by law required to be sent to the shareholders proposing the measure before a proxy is filed with the SEC -- was much "more aggressive and misleading," the pension official said.

The critical voting bloc isn't the pension funds, but the mutual fund giants of the world, like Fidelity Investments and Vanguard Group, which often vote blindly alongside board recommendations. Pension officials believe that even the typically lethargic mutual fund companies will be hard-pressed to be on record -- their votes must be publicly disclosed to shareholders of their funds -- as voting against efforts to change the board composition at these companies, where the headlines have repeatedly shown a too-cozy relationship between the boardroom and CEO.

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs