Filed by John Chevedden. Shareholders ask our Board of Directors to remove the current shareholder rights provision that considers the voice of certain Devon Energy (DVN) shareholders as non-shareholders. Currently all shares not held for one continuous year are considered non-shareholders if they seek to call for a special shareholder meeting on an important matter.
The current one-year shareholder rights exclusion for all shares held for less than one continuous year makes the current so-called shareholder right to call for a special shareholder meeting useless. There is no point to have useless right on the books of DVN.
The reason to enable all shareholders to call for a special shareholder meeting is to allow one shareholder or a group of shareholders to quickly acquire DVN shares to equal the challenging 25% share ownership requirement ($5 Billion) from all shares outstanding ($20 billion), to call for a special shareholder meeting to incentivize a turnaround of DVN should DVN find itself in a continuing stock price slump.
The best strategies for turning around a company do not necessarily come from a company’s existing shareholders.
DVN stock is in a long-term stock price slump. DVN stock was at $68 in 2014 and in late 2024 it was only at $35.
If DVN continues in its long-term stock price slump, DVN shareholders and potential DVN shareholders will not even consider acquiring more shares in order to call for a special shareholder meeting, if they have to wait one-year for their $5 Billion investment to age to call for a special shareholder meeting. A one-year holding period makes no sense. A slumping stock price demands an immediate response before the window of opportunity passes.
If one shareholder or a group of shareholders can quickly acquire more shares to call for a special shareholder meeting this is an incentive for DVN Directors to avoid a slump in the first place since the continued service of the least qualified DVN Directors could be terminated by a special shareholder meeting. This is a good incentive for the DVN Directors to have for the benefit of all DVN shareholders.
At minimum this proposal alerts shareholders to the severe limitation, to the point of uselessness, baked into the current DVN rules for DVN shareholders to call for a special shareholder meeting.