Suncor Energy Inc. investors turned their backs on one of the company's proposed board members this week. Not enough to turf the long-time director, but enough to raise eyebrows. Similarly, Encana Corp.'s results also showed a lack of faith in some board members.
Eira Thomas received support from 86.31 per cent of Suncor's shareholders when they elected the company's board of directors at its annual meeting Tuesday. By way of comparison, the next lowest director was John Huff, who raked in 96.65 per cent support.
Ms. Thomas is an accomplished executive, and has served on Suncor's board since 2006. She's a geologist, making her a good fit for Suncor, one of Canada's largest natural resources companies. She founded Stornoway Diamond Corp. and serves as its chief executive. She's a director at Lucara Diamond Corp., Dundee Precious Metals Inc., and Kaminak Gold Corp. She was once a vice-president at Aber Resources Ltd., which is now Harry Winston Diamond Corp. She's also on the Prospectors and Developers Association of Canada's board.
This list, however, is what hurt her. Glass Lewis & Co., a shareholder advisory firm, recommended investors "withhold" support for Ms. Thomas, saying she is "overboarded." Translation: She's spread too thin.
"Nominee [Ms.] Thomas serves as CEO of a public company and as a director on at least four public company boards," Glass Lewis analyst Reuben Edelson wrote in a note to clients. "We believe that the time commitment required by this number of board memberships, in conjunction with executive duties, may preclude this nominee from dedicating the time necessary to fulfill the responsibilities required of directors."
This marks a shift for Glass Lewis. It recommended in her favour in 2012, and she received 99.47 per cent support.
Suncor spokeswoman Sneh Seetal said the company stands by Ms. Thomas and her extensive experience is what makes her valuable. Suncor's press release detailing the results did not contain the percentage of votes withheld – just the percentage in favour.
Shareholder support for Encana Corp.'s proposed directors wavered in 2013. Six of its nine nominees received less than 90 per cent, and the percentage of votes withheld were also high.
Clayton Woitas, Encana's interim chief executive and soon to be chair, received the least amount of support. He received favourable votes totalling 84.52 per cent, with 15.48 per cent withheld. Suzanne Nimocks was also at the bottom, with 88 per cent support and 12 per cent withheld. David O'Brien, Brian Shaw, Bruce Waterman, and Fred Fowler all received less than 90 per cent support. Directors Peter Dea, Claire Farley, and Jane Peverett all captured about 91 per cent support. In 2012, four Encana directors received less than 90 per cent support.
"While our 2013 director voting results are marginally lower than in 2012, we view this year's vote results as a positive endorsement by our shareholders, particularly against the backdrop of continued low natural gas prices currently impacting the company," Encana spokesman Jay Averill said in a statement.
Glass Lewis recommended shareholders support all of Encana's directors in 2013. ISS Proxy Advisory Services, one of Glass Lewis' competitors, recommended shareholders support all the proposed directors for both Encana and Suncor.
While even Suncor and Encana's least popular directors ended up with a majority of the votes, their lower-than-usual support shows how proxy advisory firms wield influence. Uncontested directors routinely receive support exceeding 99 per cent.
Cenovus Energy Inc.'s least-liked director captured 95.82 per cent support with 4.18 per cent of the votes withheld.
(Carrie Tait is a Globe and Mail Energy Reporter.)
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