3. SandRidge's Campaign Foe
There was a call for "change" this week, our fellow Americans. And it did not come from President Obama on Monday during his inaugural address.
For that matter, nor did it come from Beyonce, who it turns out wasn't saying a damn thing during her pre-recorded rendition of the
Star Spangled Banner
No, while the president was on Capitol Hill trying to unify the country (or at the very least smile politely for snapshots with John Boehner), another, even larger political battle was brewing away from Washington D.C.
You guessed it: We're talking about asset manager TPG-Axon and its campaign to oust
(SD - Get Report)
entire board of directors. And judging by the letter that TPG-Axon, which owns 6.7% of the driller, addressed to SandRidge shareholders on Wednesday, this conflict is going to get really, really messy.
(OK. Begin lip-synching
The Battle Hymn of the Republic
...) "It is time for change -- the company must dramatically streamline, simplify and focus in order to build value for shareholders. However, that change must begin at the top -- please join us in replacing the current directors with directors who will serve stockholder interests," TPG-Axon said.
The investment firm then published a list of grievances so long it put the
Declaration of Independence
to shame. Although in this case, the target was not King George III, but SandRidge CEO Tom Ward, who they characterize -- not wrongly -- as even more autocratic and self-enriching than the British monarch.
"Tom Ward has reduced his percentage ownership by 75% since 2008, and has sold shares in each of the past five years, selling a total of approximately 20.6 million shares over such time period ... even as his compensation increased 70% to $25 million (between 2007 and 2011) -- a level vastly higher than peers," TPG-Axon charged.
TPG-Axon also pointed out that SandRidge's stock has declined almost 80% from its IPO in 2007 and is the single-worst-performing energy stock in the Russell 1000 Index over that period. But the authors saved their most vitriolic attacks for Ward's outsized perks and pay package, ranging from his private jets to his part-ownership of the NBA's Oklahoma City Thunder.
"SandRidge Energy has enriched management, but shareholders have suffered," TPG-Axon bellowed to potential voters.
For the love of Lincoln. Forget about "malice towards none and charity for all." These guys are out for blood and a whole lot of money.
Lucky for us, that usually leads to a whole lot of stupidity.