Private equity firm Kimmeridge Energy Management Co. LLC announced May 17 that proxy advisory firm Institutional Shareholder Services Inc., or ISS, has recommended PDC Energy Inc. shareholders to vote for Kimmeridge's board nominees.
Kimmeridge, which owns a 5.1% stake in the oil and gas producer, nominated Benjamin Dell, James Adelson and Alice Gould to serve on PDC's board.
"We are pleased that ISS has publicly recommended that PDC shareholders vote for our experienced nominees," Kimmeridge Founder and Managing Partner Benjamin Dell said. "By taking this meaningful step, ISS has shared its independent view that PDC has underperformed relative to the industry and has delivered inadequate returns to its shareholders."
ISS believes Dell brings valuable experience analyzing energy companies, having overseen operation of oil and gas assets including the operation of PDC's assets in the Permian Basin. The proxy advisory firm also said Adelson also brings experience due to his background as an executive in the exploration and production industry, which "would seem valuable given the operational challenges that PDC has faced in the Permian Basin," ISS added. ISS believes Gould also brings experience as a public company director, while enhancing the board's gender diversity.
However, ISS said it could support the reelection of PDC CEO, President and Director Barton Brookman Jr., depending on his demonstration of support and understanding of shareholder interests and alignment, raising concerns on the potential impact if Brookman is removed from the board.
On May 17, PDC Energy Inc. called on its shareholders to reject the nominations of Kimmeridge to the board of directors, ahead of its annual stockholders meeting slated for May 29. The firm instead nominated CEO Brookman and independent directors Mark Ellis and Larry Mazza for reelection.
Independent advisory firm Glass Lewis & Co. recommended that shareholders vote for PDC's nominees, saying Kimmeridge has failed to present a case for changes at the board level.