Activist-pressured natural gas pipeline operator Williams Cos. (WMB) appointed three new members to its board, expanding its size to 10 directors.
The appointees, who were announced Monday, include Stephen Bergstrom, director and former president and CEO of oil and gas infrastructure provider American Midstream Partners LP (AMID) ; Scott Sheffield, chairman and CEO of oil and gas producer Pioneer Natural Resources Co. (PXD) ; and William Spence, chairman, CEO and president of utility PPL Corp. (PPL) .
Tulsa, Okla.-based Williams said the directors were selected with the help of Spencer Stuart and that its board now has nine independent directors.
Williams chairman Kathleen Cooper said in a statement that the appointees bring deep expertise, business acumen and longstanding energy industry experience to its board. "All three of our new directors are well-known for their outstanding records of performance serving as board members and chief executive officers of publicly traded energy companies and we are looking forward to benefiting from their fresh perspectives and deep industry insights," she said.
The three appointees said in a joint statement that the Williams' board is committed to strong corporate governance and acting in the best interests of stockholders. "We look forward to bringing our diversity of perspectives and experiences, as well as additional strong independent voices, to help set the company's strategy, oversee management and advance the company's efforts to enhance value for Williams' stockholders," they said.
Williams reiterated that its stock has increased by 35% since announcing a series of actions, including a new strategic plan. Those actions have included funding new fee-based projects at affiliate Williams Partners LP (WPZ) , signing new gathering contracts in the Barnett Shale and the mid-continent, including with Chesapeake Energy Corp. (CHK) , selling its Canadian businesses to Inter Pipeline Ltd. for $1 billion and cutting costs.
On Friday Williams announced it was buying 6.975 million common units of Williams Partners at $35.84 each, or $250 million, to enhance value, boost the credit profile and finance projects at its affiliate.
Activist hedge fund Corvex Management LP issued a public letter to Williams' shareholders on Aug. 24 saying it had submitted the names of 10 Corvex employees as nominees to its board, including Corvex managing director Keith Meister, who would act as placeholders until the firm had time to select a slate of long-term directors. The deadline for submitting nominees for the Nov. 23 board meeting was Aug. 25.
Williams responded that it received the nominee list and that it would seriously consider the candidates but called the proxy contest "distracting" and "costly."
Meister and five others resigned from Williams' board in June over disagreements with company management, including CEO Alan Armstrong, who was against Williams' failed acquisition by an affiliate of Energy Transfer Equity LP (ETE) . Corvex owns 4% of Williams.
Meister has said the board's actions since he resigned have reinforced his concern that its directors aren't the best stewards for Williams going forward. He didn't specify the actions but noted reports that Williams rebuffed a buyout by Enterprise Products Partners LP (EPD) .
The activist investor said a company like Williams should have a board made up of directors whose experience was more comparable with other large public companies such as Marathon Petroleum Corp. (MPC) and Phillips 66 Co. (PSX) and that shareholders should be able to determine the most qualified "draft picks."
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