El Paso ( EP) is starting to fight like a scrappy underdog. The Houston energy giant was knocked down Tuesday by a powerful recommendation against current leadership in a heated proxy fight. With the odds now tilted against it -- and just two weeks left to cast votes -- the company is throwing some fierce punches at a strong dissident camp. On Tuesday, El Paso criticized proxy adviser Institutional Shareholder Services for a "flawed" decision that went against incumbent management, even as it vowed to win the fight anyway. And in attacking ISS, the nation's leading proxy firm, El Paso jumped on the opportunity to kick around its opponents anew. "Notwithstanding ISS's flawed evaluation," the company stated, "we believe our shareholders share our concerns regarding the risks of replacing our entire board with a slate of nominees that has no well-defined business plan for El Paso and that has selected one of its own as CEO without undertaking a process to select the best possible candidate for this critical post." El Paso is now relying heavily on its "sizable retail shareholder base" to carry it to a victory. In the meantime, the company is taking direct aim at several dissident candidates who are among those fighting to replace the entire board. The company has specifically linked one candidate to a long career at Enron and two others to the boardroom of a bankrupt energy company. But El Paso's targets are now dodging those punches and criticizing the company's aim. El Paso stock, having nearly tripled off its winter low after a long plunge, rose 7 cents Tuesday to $9.
The Enron 'Taint'
Ron Burns, a veteran of Enron, was the first to fight back. In a research note issued last week, Prudential analyst Carol Coale mentioned that Burns' history as "co-head with Jeff Skilling of Enron Capital and Trade may not sit well with certain shareholders." But the dissidents insist that El Paso latched onto the one -- very brief -- part of Burns' career that might trigger worry. Burns himself stresses that he spent only one of his 21 years at Enron working alongside the now-scandalized Skilling.