Energy

Proxy adviser Glass Lewis backs Noble Energy sale to Chevron - memo

Credit: REUTERS/LOREN ELLIOTT

Glass Lewis has recommended that shareholders of Noble Energy Inc vote in favor of the energy producer's proposed $5 billion acquisition by Chevron Corp, the proxy advisory firm said in a statement on Friday.

Adds detail, context

NEW YORK, Sept 18 (Reuters) - Glass Lewis has recommended that shareholders of Noble Energy Inc NBL.O vote in favor of the energy producer's proposed $5 billion acquisition by Chevron Corp CVX.N, the proxy advisory firm said in a statement on Friday.

However, Glass Lewis said that Noble's shareholders should vote against so-called golden parachute payments to certain Noble Energy executives, which would be triggered by the sale of the company.

Chevron announced its proposal to buy Noble Energy for $5 billion in stock on July 20. It represented the first big energy deal since the coronavirus pandemic crushed global fuel demand and sent crude prices to historic lows.

In supporting the transaction, Glass Lewis said it found the proposal to be "both strategically and financially compelling" to Noble investors, with the combined company offering a number of benefits that would be unavailable to Noble as a standalone entity.

Despite this, Glass Lewis said the proposed payments to executives, including Noble Energy Chief Executive David Stover, were "excessive" and should be rejected by shareholders.

"Although the company may have been contractually and legally obligated to make these payments due to employment agreements, we believe shareholders should question whether the size of these awards is the best use of company capital," it said.

Such change-of-control payments are designed, in the event of a sale of the company, to compensate executives, who may find themselves redundant given there is unlikely to be enough roles in the combined company for both management teams.

Noble shareholders are due to vote on the Chevron deal on Oct. 2. The deal has also been recommended by fellow proxy adviser Institutional Shareholder Services (ISS).

(Reporting by David French Editing by Chizu Nomiyama and Steve Orlofsky)

((davidj.french@thomsonreuters.com; +1 646 223 5211; Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CVX

Other Topics

US Markets

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More