EQT shareholders meeting disrupted, inside and out
April 20, 2012 12:00 AM
A protester with "One Pittsburgh" is removed from EQT Plaza.
Timothy Lynn of Spring Garden is taken into custody at EQT Plaza.
Rosalie Hannah, of Shadyside, was taken into custody at EQT Plaza.
Darrell Sapp / Post-Gazette
Protesters are pushed from entering the Au Bon Pain cafe at the EQT Plaza, Downtown.
By Erich Schwartzel Pittsburgh Post-Gazette
Annual meetings of shareholders usually don't get much more exciting than the ratification of a public accounting firm. But lately, the gatherings have begun to require extra security.
That was the case Wednesday at EQT Corp., the Downtown-based energy firm that was the latest to see its annual gathering of shareholders disrupted by demonstrators both outside its headquarters and inside its conference room.
Two protesters were cited for disorderly conduct and led away in handcuffs. Workers at a nearby Au Bon Pain locked the doors. Inside the conference room, security guards stood along the wall in dark suits and earpieces, threatening to remove anyone who didn't leave the room when requested.
Protesters force delay at EQT annual meeting
Protesters force a delay at EQT's annual meeting. (Video by Nate Guidry; 4/18/2012)
And when EQT Chairman and CEO David Porges started to smile, he was told to wipe that smirk off his face.
The ho-hum of annual shareholder meetings has taken on an angry tenor of class warfare across the country. Movements with echoes of the Occupy Wall Street cause have found a new protest zone, often buying shares as a way to bring their concerns about income inequality and company practices to the board.
Causes being raised range from board of director salaries to public transit budget cuts. In EQT's case, the disruption triggered a two-hour recess, and the board of directors and senior management didn't come back for the conclusion of the meeting.
Mr. Porges believes the disruption at his firm's event was part of a "broader movement" of anti-corporation sentiment. "I don't think the unrest had anything to do with EQT proper," he said after the meeting.
Proving that point, he said, was the fact that many speakers knew little about EQT or how it operates. Their goal, he said, was simply to disrupt the meeting.
"And I think, from their perspective, it worked," he said.
It was indeed a tale of two meetings. The first was a bar fight in a conference room filled with directors, executives, fracktivists and populists. The second was corporate due diligence performed for an audience of 11 -- or 13, if the tally includes the security guards who stayed around.
EQT fielded a double whammy of complaints, attracting criticism from anti-drilling groups trying to stop development in the Marcellus Shale natural gas formation and anti-corporation groups rallying behind the 99 percent. Since only shareholders are allowed to attend the meetings, activists had to buy at least one share to get in the door.
But longer-term shareholders have recently made waves at major companies, too. On Tuesday, about 55 percent of shareholders rejected the compensation package for top executives at New York-based Citigroup, including a $15 million payday for CEO Vikram Pandit.
The vote is nonbinding, meaning the board can still go ahead with the planned compensation, but the rebuke was seen as warning for the financial industry for tough public relations ahead.
"From time to time, there's been institutional activism, but nothing like what I've seen here," said Barry Mitnick, professor of business administration and public and international affairs at the University of Pittsburgh's Katz Graduate School of Business.
Institutional investors, which are organizations that pool money from numerous sources to invest in companies, can control a significant amount of shares. They drove the Citigroup decision, and are more likely to be concerned with how executive compensation ties to performance and stock prices, Mr. Mitnick said.
Frustrations over general income inequality -- the kind that fuel public demonstrations -- are also becoming more widespread, but it's heavyweight institutional investor decisions that will force boards to consider changes, he said.
Here in Pittsburgh, many of the same protesters at EQT's gathering showed up at the BNY Mellon annual meeting held in town last week, where Chairman and CEO Gerald Hassell spent more than two hours trying to placate demonstrators.
Organizers with OnePittsburgh, a group of citizens protesting what it sees as corporate and governmental greed across the region, have had a busy schedule this week: On Monday, they protested UPMC. On Tuesday, they stood in solidarity with the Occupy movement at a demonstration in Market Square. Wednesday morning brought the EQT meeting.
The only shareholder proposal on the EQT proxy was introduced by the Ohio Public Employees Retirement System, which owns 76,420 shares. It sought to shorten board of director tenure from three years to one. The system's two corporate governance staffers traveled to Pittsburgh for the meeting. EQT recommended voting against the proposal, saying abbreviated terms would reduce stability and make the board more vulnerable to takeover by special interest groups. A majority of shareholders voted for the proposal.
The meeting was temporarily adjourned after demonstrators began shouting over Mr. Porges, who repeatedly asked that any questions raised pertain to the four items up for vote. Some speakers brought up concerns over drilling contaminating groundwater supplies, some questioned the ethics of the board, one asked Mr. Porges how he sleeps at night.
Another wanted to know if the board supported the so-called Buffett Rule, a recently defeated piece of federal legislation trying to raise tax rates on top earners. EQT directors all made more than $200,000 in total compensation for sitting on the board last year, and Mr. Porges earned $7.4 million.
Mr. Porges defended his firm's compensation packages. He said he'd seen a chart on MSNBC on Wednesday that showed the average ratio of pay between the nation's CEOs and regular workers, and that EQT's was much fairer. That was no consolation to the group, which only began shouting louder when security guards came to escort them back to their seats.