Bullies and thugs never win in the long run.
For some background: Range Resources issues aggressive attack on shareholder rights
October 2, 2013 // Boston, MA: Trillium Asset Management’s (Trillium) Investment Management Committee recently decided to sell all client holdings in the natural gas company Range Resources (NYSE: RRC) and to remove the company from our “Buy List”.
Given the importance of operational efficiency to Range Resources’ profitability, as well as the regulatory, environmental, and social license risks facing the company, Trillium believes that the company’s current level of disclosure related to methane leakage is woefully inadequate.
Leaking methane also represents lost revenue and raises the potential for increased regulatory and legal expense. Better transparency and the use of best practices to mitigate fugitive emissions would benefit Range Resources’ shareholders.
Earlier in 2013, Trillium filed a shareholder resolution with the company requesting that:
“the Board of Directors publish a report (by October 2013, at reasonable cost, and omitting proprietary information) for investors on how Range Resources is measuring, mitigating, setting reduction targets, and disclosing methane emissions.”
21.7% of Range Resources shareholders voted in favor of this resolution.
In response to the proposal, management submitted an inflammatory SEC filing, attacking shareholder rights and falsely claiming a misalignment between Trillium and the company’s “real stockholders”, despite Trillium’s holdings in the company at the time.
The company’s response is in sharp contrast to some industry peers that appear ready to address the issue of fugitive methane emissions and work with its shareholders. The unexpected reaction from management left us with profound reservations about its ability and willingness to address this critical issue or respect shareholder rights.
“We believe that there is a direct correlation between a company’s environmental, social and governance profile and the quality of its management.” said Matthew W. Patsky, CEO of Trillium Asset Management. “Range Resources’ expressed contempt for its shareholders is of great concern to us. Our loss of confidence in management makes it untenable to continue to hold its shares on behalf of our clients.”
Spilling is just the beginning…