Feb 15 A majority of SandRidge Energy Inc's
directors should be replaced due to governance problems
at the oil and gas company, proxy advisory firm ISS said in a
report on Friday.
Hedge fund TPG-Axon Capital Management, one of SandRidge's
largest shareholders, has launched a campaign to replace all of
SandRidge's board and oust Chief Executive Tom Ward, citing weak
management and the company's poor stock performance.
The proxy advisory firm said that shareholders should back
five of TPG-Axon's seven nominees.
"ISS is reluctant to recommend for a majority change in a
board, given the risks of unintended consequences ... In this
case, however, the apparent failures of stewardship on this
board are legion," ISS wrote, citing among other factors the
company's weak capital discipline and compensation practices.
SandRidge said it strongly disagreed with ISS'
recommendation and continues to urge stockholders to reject
TPG-Axon has made allegations of self-dealing by Ward and
his family in land deals with the company. SandRidge has given
Ward wide latitude to profit from personal oil-and-gas deals in
ways that pose potential conflicts of interest with the company,
according to a Reuters review of employment contracts and recent
ISS recommends that SandRidge board members Everett Dobson,
William Gilliland, Daniel Jordan, Roy Oliver and Jeffrey Serota
be replaced by five dissident nominees including TPG-Axon's
founder Dinakar Singh.
ISS is an independent firm that makes recommendations to
large institutional shareholders on how they should vote on
SandRidge's current board has seven members, including CEO
"We have a strong and experienced board that is committed to
delivering value to all stockholders," the company said in a
Shares of SandRidge rose 4 cents to $5.91 in Friday
afternoon trading on the New York Stock Exchange.