Crescent Point Energy Corp.’s chief executive pledged to overhaul executive pay after fending off an approach from activist investor Cation Capital Inc. that targeted the company’s lavish compensation practices.
Crescent Point said shareholders on Friday backed all 10 of the company’s board nominees and rejected a slate of four directors put forward by Cation, bringing an end to a short but heated proxy contest in the oil patch.
But investors also defeated a say-on-pay motion that asked them to endorse the way Crescent Point pays its executives. Calgary-based Crescent Point lost a similar vote at its annual shareholder meeting in 2016.
Top executives at Crescent Point earned $93.5-million over five years, even as the stock price fell by 76 per cent since early 2013, according to Cation.
“We’re obviously going to readdress that, and hopefully have better share-price performance tied to it,” CEO Scott Saxberg told reporters after the company’s closed-door AGM in downtown Calgary. Mr. Saxberg is also a director with the company.
Cation, led by former investment banker Sandy Edmonstone, launched a proxy contest in April, even though the upstart fund held just 0.3 per cent of the outstanding shares.
Its initial broadside criticized Crescent Point for generous executive pay, high costs and debt levels, and for lacking a cohesive strategy to improve a stock price that has shed about three-quarters of its value since 2014.
The campaign received partial support from the British Columbia Investment Management Corp., which followed a recommendation from advisory firm Institutional Shareholder Services Inc. that endorsed two Cation nominees.
But more shareholders sided with a view expressed by Glass Lewis & Co., which had dismissed Cation’s blueprint for change as vague and “bereft of any meaningful substance.”
In the vote for directors, Mr. Saxberg received about 10 times the level of support that went to Mr. Edmonstone, previously deputy head of global oil and gas at Macquarie Group. Two other dissident nominees each received votes representing more than 100 million shares.
Crescent Point shares slumped 1.9 per cent in Friday’s session on the Toronto Stock Exchange to close at $10.18.
Earlier this week, the stock tumbled as much as 8 per cent after the company posted a surprise $91-million net loss of the first quarter, compared with a profit of $119-million in the year-ago period.
The company on Thursday cut its 2018 capital budget by $25-million and tweaked its criteria for executive pay to “incorporate feedback and further align compensation with returns and capital allocation.”
It also said it aimed to close a $225-million asset sale to an unnamed buyer by June 30, funds the company said it would use to repay debt. “That’s a positive signal to the market,” Mr. Saxberg said on Friday.
Mr. Edmonstone declined comment on Friday after the meeting. The nominees Cation put forward were Mr. Edmonstone, retired GMP Capital banker Tom Budd; Dallas Howe, former chairman of Potash Corp. of Saskatchewan; and Herb Pinder, director of natural gas producer ARC Resources Ltd.
Although the meeting was closed to media, applause could be heard outside the Imperial Ballroom at Calgary’s Hyatt Regency hotel after Friday’s vote.
Mr. Budd said he was surprised that shareholders had not acted more swiftly to push for change at the company, given its track record of value destruction.
“For Scott to admit that with pressure from us he’s finally been able to be teachable and learn what his shareholders want after three years of the most dismal performance of the sector, that says a lot about what a great job Sandy’s done exposing what’s really gone on,” Mr. Budd said.
“Basically, the board’s let Scott do whatever he’s wanted for three years.”