NEW YORK: Glass Lewis has recommended that shareholders of Noble Energy Inc. vote in favour of the proposed $5 billion acquisition by Chevron Corp, the proxy advisory firm said in a statement on Friday.
Chevron announced its proposal to buy Noble Energy for $5 billion in stock on 20 July. It represented the first big energy deal since the coronavirus pandemic crushed global fuel demand and sent crude prices to historic lows.
In supporting the transaction, Glass Lewis said it found the proposal to be “both strategically and financially compelling” to Noble investors, with the combined company offering a number of benefits that would be unavailable to Noble as a standalone entity.
However, Glass Lewis said Noble’s shareholders should vote against “excessive” payments to certain Noble Energy executives, including Chief Executive David Stover, which would be triggered by the sale of the company.
“Although the company may have been contractually and legally obligated to make these payments due to employment agreements, we believe shareholders should question whether the size of these awards is the best use of company capital,” it said.
Noble shareholders are due to vote on the Chevron deal on 2 October. The deal has also been recommended by fellow proxy adviser Institutional Shareholder Services.