DEVON ENERGY CORPORATION | Reform special shareholder meeting requirements at DEVON ENERGY CORPORATION

Status
36.27% votes in favour
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
DVN
Lead filer
Individual
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Energy
Company HQ country
United States
Resolved clause
"Shareholders ask our board to take the steps necessary to amend the appropriate company governing
documents to give the owners of a combined 10% of our outstanding common stock the power to call a special
shareholder meeting. This includes that each share shall have an equal right per share to formally participate in
the calling for a special shareholder meeting to the fullest extent possible."
Supporting statement
"The current Devon Energy right to call for a special shareholder meeting is like a bait and switch right. The bait is
the 25% figure which seems somewhat favorable.
However it goes downhill fast from here. Only non-street name shares have a right to call a special shareholder
meeting.
Thus if one makes the reasonable estimate that 50% of Devon Energy stock is non-street name stock, it means
that our current requirement that 25% of shares are needed to call for a special shareholder meeting translates
into 50% of this one category of stock and all other Devon Energy shares are 100% excluded.
The next downhill bump is that all shares not owned for one full continuous year are 100% excluded. Thus the
owners of such 50% of Devon Energy stock could determine that they own 65% of the exclusive category of
Devon Energy stock that can call a special shareholder meeting if they include the shares that are owned for less
than a full continuous year. Thus a somewhat favorable figure of 25% can translate into a steeply unfavorable
65% of shares to call a special shareholder meeting.
The 10% figure, that gives each share an equal right to formally participate in calling for a special shareholder
meeting, is also reasonable because the laws of some states mandate that 10% of shares be able to call a
special shareholder meeting without the Devon type strings attached. Another sign that a 10% of shares is
reasonable is that some companies that have a 25% figure then allow the 10% figure to apply to one
shareholder who owns 10% of shares.
Calling for a special shareholder meeting is hardly ever used by shareholders but the main point of the right to
call for a special shareholder meeting is that it gives shareholders at least significant standing to engage
effectively with management. Devon management professes to be strongly in favor of shareholder
engagement.
Devon management will have an incentive to genuinely engage with shareholders, instead of stonewalling, if
shareholders seeking engagement have a realistic Plan B option of calling a special shareholder meeting."

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