Stelliam Investment Management LP, a New York City-based investment management company and significant shareholder of Range Resources Corp. (NYSE: RRC), has sent a letter to James Funk, lead independent director of the board of Range, indicating its intention to vote against the company’s board nominees and against its advisory vote to approve executive compensation at the upcoming annual meeting, to be held on May 16, 2018.

In the letter, Stelliam said: “We believe compensation should be tied to performance, not who sits in a particular seat. Regarding this point, management’s annual compensation has remained generous over the past four years while the stock has declined approximately 80%.

The company listed its specific concerns as:

  • The systemic annual awarding of increasing numbers of shares at successively lower prices to the management and board;
  • The board has rewarded failure by approving the payment of enormous “retirement” benefits to executives, including Roger Manny, who as CFO oversaw the disastrous Memorial Resources acquisition; and
  • The board has established undemanding performance metrics for management to be paid millions of dollars. For example, the target for production growth in the 2018 short-term incentive program is set such that management would attain the maximum payout even if the company misses its guidance to analysts and investors.