Like another crosstown oil and gas exploration company based in Oklahoma City, Sandridge Energy (SD) is exhibiting the same shareholder inimical corporate governance practices. The good news is the abusive reign of Chesapeake Energy (CHK) king Aubrey McClendon last week came to an abrupt end. The bad news is that Sandridge founder and CEO Tom Ward (also a CHK co-founder) continues presiding unchecked as an autocrat. Like at CHK, Mr. Ward instituted his own analogue version of Aubrey’s Founders Well Participation Program (FWPP), the Sandridge Executive Well Participation Program (SEWPP). While Aubrey got to cherry pick and invest in a 2.5% interest in CHK wells, Mr. Ward felt even more generosity towards himself, upping his take to 3%. Like Aubrey in the past, Mr. Ward is obscenely overpaid. Mr. Ward presides over a sycophantic board that obsequiously bows to Caesars commands. Thanks in large part to the activism of Carl Icahn, Chesapeake, being free of Aubrey and most of his cabal of board members now has a chance to “right the ship” and create value for shareholders. Now come along hedge fund TPG Axon and CEO Dinakar Singh. Mr. Singh’s hedge fund has acquired a 6.7% stake in the common shares of Sandridge and has undertaken a “consent solicitation” to replace the entire Sandridge board and the subsequent ouster of Mr. Ward. Sandridge laughably claims the TPG Axon director slate lacks requisite energy experience. Each of the seven potential directors have held high positions at companies like BP, El Paso Eastern Pipeline, Oryx Energy or currently serve on boards of major NYSE companies such as Kraft Foods and AOL. The only commonality of current Sandridge board of directors is a blind obeisance to a CEO who compensates each one around $375,000 annually or for perspective, $80 to $90,000 more than is received by directors of integrated giant Exxon-Mobil, a company over 130 times its market capitalization. Put another way, in just a little more than every two days, Exxon takes in more in revenue than the entire market cap of Sandridge.
Like another crosstown oil and gas exploration company based in Oklahoma City, Sandridge Energy (SD) is exhibiting the same shareholder inimical corporate governance practices. The good news is the abusive reign of Chesapeake Energy (CHK) king Aubrey McClendon last week came to an abrupt end. The bad news is that Sandridge founder and CEO Tom Ward (also a CHK co-founder) continues presiding unchecked as an autocrat. Like at CHK, Mr. Ward instituted his own analogue version of Aubrey’s Founders Well Participation Program (FWPP), the Sandridge Executive Well Participation Program (SEWPP). While Aubrey got to cherry pick and invest in a 2.5% interest in CHK wells, Mr. Ward felt even more generosity towards himself, upping his take to 3%. Like Aubrey in the past, Mr. Ward is obscenely overpaid. Mr. Ward presides over a sycophantic board that obsequiously bows to Caesars commands. Thanks in large part to the activism of Carl Icahn, Chesapeake, being free of Aubrey and most of his cabal of board members now has a chance to “right the ship” and create value for shareholders. Now come along hedge fund TPG Axon and CEO Dinakar Singh. Mr. Singh’s hedge fund has acquired a 6.7% stake in the common shares of Sandridge and has undertaken a “consent solicitation” to replace the entire Sandridge board and the subsequent ouster of Mr. Ward. Sandridge laughably claims the TPG Axon director slate lacks requisite energy experience. Each of the seven potential directors have held high positions at companies like BP, El Paso Eastern Pipeline, Oryx Energy or currently serve on boards of major NYSE companies such as Kraft Foods and AOL. The only commonality of current Sandridge board of directors is a blind obeisance to a CEO who compensates each one around $375,000 annually or for perspective, $80 to $90,000 more than is received by directors of integrated giant Exxon-Mobil, a company over 130 times its market capitalization. Put another way, in just a little more than every two days, Exxon takes in more in revenue than the entire market cap of Sandridge.
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