“No Action” – A Closer Look

tpltblogger11 Comments

The following are excerpts from the four shareholder proposals that TPL management is petitioning the SEC to not address:

Stockholder Proposal of Gabi Gliksberg

Shareholders ask our Board of Directors to take the steps necessary to permit removal of  directors by a majority vote of shareholders, with or without cause, to the fullest extent possible and that this be called out in the bylaws and/or Articles of Incorporation.

TPL’s present bylaws provide excessive job security for the Board of Directors. The bylaws can provide job security to a director who clearly needs to be removed but the director insists with finding fault with credible evidence. In addition, the bylaws can even provide job security to a director who has been convicted of a felony by a court of competent jurisdiction so long as that conviction remains subject to direct appeal!

Shareholders should hold the power to vote on removing directors without the need for cause. This proposal represents an important step forward in director accountability.

Stockholder Proposal of Jason Hubert

Shareholders request that TPL’s Board of Directors perform a review of the
Company’s processes surrounding the preparation of its SEC-filed Proxy
Materials.

Stockholder Proposal of Lion Long Term Partners LP

Resolved, that the Board of Directors of the Company adopt a policy
whereby, in connection with any proposal to increase the authorized number of
shares of common stock of the Company, other than solely through a stock split,
the Company request the New York Stock Exchange (“NYSE”), when first
submitting the Company’s proxy materials to the NYSE for review, not to categorize
such proposal as routine under Rule 452 of the NYSE’s Guide.

Stockholder Proposal of Special Opportunities Fund

RESOLVED: The stockholders will consider it a breach of fiduciary duty for the  board of directors to authorize severance pay for any senior manager in excess of such individual’s base annual compensation unless it is unanimously approved.

SUPPORTING STATEMENT: The Company has been engaged in contentious litigation with certain directors. Given this tension in the boardroom, we believe it is possible that at some point there may be changes to the board of directors and to senior management. The purpose of this non-binding proposal is to advise the directors that the stockholders believe that, unless unanimously approved by the board, authorizing any severance pay that would constitute a lucrative golden parachute for any senior manager may be subject to a legal challenge as a breach of a director’s fiduciary duty.

Talking my book but all seem prudent and in keeping with good governance to me. We’ll probably never know (though we can suspect) who has/had the real decision rights behind many of the micro actions (such as trashed proposals) taken by the company that were so obviously contrary to the wishes of engaged investors. Perhaps the “refreshed” board (and by extension management team) will foster a culture of prioritizing shareholder interests over entrenchment, ego, and contempt.

11 thoughts on ““No Action” – A Closer Look”

  1. Shareholders should support all the proposals and it seems brazen for the current board to oppose all four. Surely any reasonable person can see that.

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  2. Being the “Devils Advocate” I have to ask how can you understand the proposals and the companies rational for wanting to exclude them unless you have reviewed the letters requesting approval to exclude them filed with the SEC. Its a lot of legalese to wade thru, but these are the rules the game is being played by. I have saved you the trouble of finding the links to them on the SEC website.

    Click to access gliksbergtexaspacific072123-14a8-incoming.pdf

    Click to access huberttexaspacific072123-14a8-incoming.pdf

    Click to access lltptexaspacific072123-14a8-incoming.pdf

    Click to access specialtexaspacific072123-14a8-incoming.pdf

    Liked by 1 person

  3. Thank you L.D. for your hard work. The more the shareholders learn, the scarier it gets. Someone is telling TPL legal counsel to oppose these directives. Who is it?

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  4. From what I’ve seen in the proxies for other stocks I own, it is very rare that any company recommends a “For” vote for any shareholder proposals. It’s a knee jerk reaction as if the “leadership” can’t fathom that it’s a good idea unless it comes from them. Still, with all the disgraceful governance we’ve witnessed the last few years, one would think that TPL could make a token gesture of being pro-shareholder to turn over a new leaf.

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    • I believe the only reason we are getting a declassified Board is Gilksberg’s lawsuit of a couple of years ago. You can see he hasn’t given up and left the building. The 4th one is a little troubling because of unintended consequences. The list is long but the one that got my attention was the last one.

      “One of the underlying goals of the Proposal is for the Board to unanimously approve certain severance arrangements. Pursuant to the broad language of the Proposal, the vote of the Company’s Chief Executive Officer (the “CEO”), a member of the Board and presumably a “senior manager” under the Proposal, could then be required to vote to approve his own severance arrangement. By mandating a unanimous vote requirement even for decisions on CEO severance, the Proposal forces the participation of an interested director in such decisions, which is impermissible under the Company’s Corporate Governance Guidelines. Thus, the 1 Company believes that the Proposal is properly excludable under Rule 14a-8(i)(6).”

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  5. Here is some more information that may be useful in evaluating the submitted proposals proposed to be excluded. That is the submission date of each of the proposals. The submissions were all made in early June with only one revised in early July all before the recent developments of late July and early August.

    “proposal submitted by Gabriel Gliksberg (the “Proponent”) on June 6, 2023, as revised on July 3, 2023”
    “proposal submitted by Jason Hubert (the “Proponent”) on June 8, 2023”
    “proposal submitted by Lion Long Term Partners LP (the “Proponent”) on June 8, 2023”
    “proposal submitted by Special Opportunities Fund (the “Proponent”) on June 9, 2023 (the “Proposal”)”

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  6. In the interest of sharing information are you all aware of the “Governance Documents” page on the TPL website that provides download links to nine documents including the –

    Corporate Charter
    Amended and Restated Bylaws
    Audit Committee Charter
    Compensation Committee Charter
    ​​Nominating and Governance Committee Charter
    Corporate Governance Guidelines
    Code of Business Conduct and Ethics
    Human Rights Policy
    IT and Cyber Security Policy

    https://www.texaspacific.com/investors/corporate-governance/governance-documents

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