I've said a lot of nice things about offshore engineering ace Acergy
Bob Robotti of Robotti & Company, a shareholder since 1995, has been a fan of Acergy far longer than I. When he speaks out about the subsea player's shortcomings, he's not pulling some quick-flip hedge fund routine. His firm's position in Acergy exceeded those of next-largest holdings Panhandle Oil & Gas
In a letter to the Board of Directors, Robotti has outlined a slew of soft spots in Acergy's corporate governance, flaws that should be worrisome to any Acergy shareholder. Even if you don't know Acergy from your elbow, you can still learn from these examples, and keep a closer eye on how your own investments treat outside shareholders.
Here are a few highlights of the lengthy letter:
- Acergy appears to have issued options in excess of the number approved by shareholders.
- The company has proposed a large equity compensation package with no extended holding period for the restricted stock awards. Worse, these shares would be issued at a time when shares appear to be dramatically undervalued.
- Acergy is holding repurchased shares in treasury, rather than canceling them like PotashCorp
(NYSE:POT)does. There is a 10% ceiling preventing the company from maximizing the opportunity to repurchase a slug of shares at today's low prices.
- Board members' ownership was an abysmal 0.04% of shares outstanding, as of April 30, 2008.
That last bullet sums it up pretty well. There's a lack of an ownership culture here, which too often leads to lapses on other fronts, such as the ill-conceived long-term compensation plan. Helix Energy Solutions
Fool contributor Toby Shute doesn't have a position in any company mentioned, but he's been known to rate an oil and gas firm or two (hundred) over in CAPS under the name TMFSmashy. The Motley Fool has a disclosure policy.