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Cheniere Energy may face tough road in compensation fight

  • Legal experts say Cheniere Energy (LNG +1.9%) executives could face a tough legal battle against shareholders who have taken action to try to force CEO Charif Souki to return more than $1.6B in compensation.
  • “It looks like a serious lawsuit,” says UofPenn corporate law professor William Bratton, adding that a legitimate challenge in the Delaware Court of Chancery will receive close scrutiny.
Comments (23)
  • gcmagone
    , contributor
    Comments (964) | Send Message
     
    This is a test of the Delaware court's sincerity in policing corporate behavior. Since this is a blatant example of theft of shareholder money, now is the time to lower the hammer.
    16 Jun 2014, 01:23 PM Reply Like
  • kevn1111
    , contributor
    Comments (103) | Send Message
     
    Agree....and blatant is an understatement.
    16 Jun 2014, 01:28 PM Reply Like
  • Diggerdugit
    , contributor
    Comments (78) | Send Message
     
    Agree. What is this BOD thinking---are they all NUTS????
    16 Jun 2014, 01:43 PM Reply Like
  • beta1111
    , contributor
    Comments (4) | Send Message
     
    THE COMPENSATION IN STOCK IS GIVEN IN LIEU OF A COMPENSATION IN CASH AS PER THE INCENTIVE CONTRACTS FOR ALL EMPLOYEES AT LNG. If the stock is returned the company should pay as per contract compensation in cash. The employees had to attain certain goals to obtain such compensation, they attained it and are getting their compensation as agreed. The stock did not go up from nearly zero to 66 just on short covering. LNG obtained billions of dollars of 20/30 years contracts worldwide. So please stop moaning and read the facts. The only mistake that was done was a misreading of the abstention vote as per Delaware law. If they reverse the compensation stocks LNG will have to pay cash to employees as per their contracts.
    16 Jun 2014, 02:23 PM Reply Like
  • King Rat
    , contributor
    Comments (848) | Send Message
     
    beta1111

     

    I am calling you out as a skunk.

     

    You have 3 comments total, and all today, all in defense of Cheniere's CEO.

     

    No way you don't have a vested interest you are not disclosing. Go away.
    16 Jun 2014, 03:52 PM Reply Like
  • beta1111
    , contributor
    Comments (4) | Send Message
     
    HALF SKUNK, HALF RAT. Would you agree with that? Will your confederation of useless commentators accept me? Also I own 0.0000 shares of LNG.
    17 Jun 2014, 01:48 PM Reply Like
  • beta1111
    , contributor
    Comments (4) | Send Message
     
    From what I understand these were compensations in stock in lieu of cash. So the shares could be returned but LNG still owes compensation to its employees as per their contract. There is no theft involved. The compensations were due because the employees attained their goals as per contract. What is being built in Sabine pass is not a chimera, the contracts obtained worldwide for 20/30 years are not a dream.
    Stop moaning on things you do not even have any idea on.
    16 Jun 2014, 02:27 PM Reply Like
  • jgrizz48@gmail.com
    , contributor
    Comments (13) | Send Message
     
    MY QUESTION IS DO THE SHARHOLDERS WHO ARE GETTING 1.6 BILLION DOLLAR WORTH OF SHARES TAKEN, KNOW THIS WAS PART OF THE COMPANIES CONTRACT? AND HOW IS THIS GOING TO AFFECT THEIR INTREST?
    17 Jun 2014, 04:33 AM Reply Like
  • Thinking DNA
    , contributor
    Comments (55) | Send Message
     
    Let's not over-react; I do not think there was egregious misconduct I think it was more of an oversite or misunderstanding. Everything will be cleared.

     

    That said I do think LNG/CQP needs to review there new request for an additional ~$2Bn in compensation, when you consider they have roughly 450 employees that equals roughly to $4.4M per...
    16 Jun 2014, 02:35 PM Reply Like
  • beta1111
    , contributor
    Comments (4) | Send Message
     
    again, this additional 2 billion is over five years and only if the market cap/and other financial objectives are met (makt cap has to increase by more than 10 BILLION I think) for them to obtain this compensation. If you criticize their incentive plan or blow the morale of the employees, a lot of them will quit. The supposed complainee, Mr Jones (or is it Mr Smith?)
    bought his shares at 2.5 bucks. What is he complaining about? If it was not for incentive his stock would be maybe still at 2.5 bucks. I wonder what inspired him to buy this stock (maybe Jim Cramer)
    16 Jun 2014, 03:13 PM Reply Like
  • stary kozel
    , contributor
    Comments (130) | Send Message
     
    I agree with Beta. This practice of compensations in stock in lieu of cash is nothing unusual.
    1) Saves company's cash therefore no need to borrow even more money
    2) Employees who hold share options have vested interest in the well being of the company. So they will work their asses of and do not complain.
    3) It helps to prevent loss of talent. Which the moaners above obviously lack.
    16 Jun 2014, 02:39 PM Reply Like
  • THE QUILL
    , contributor
    Comments (96) | Send Message
     
    I agree with stary kozel.

     

    THE QUILL
    19 Jun 2014, 07:35 PM Reply Like
  • abdullah999
    , contributor
    Comments (425) | Send Message
     
    In my opinion, if there's one CEO out there that deserves that kind of compensation, it's Charif Souki. He built this company from scratch and - despite all the funding and political hurdles - managed to turn it into a success. Consider all the CEOs that mismanage companies and get paid billions over decades (Lehman's Dick Fuld anyone?). Or those that inherit an amazing company and get paid millions for being idle "leaders" (Coca Cola / Pepsi).

     

    $LNG is actually remarkably cheap IMO, despite it's incredible price appreciation. I think shareholders and managers will continue to be rewarded handsomely.
    16 Jun 2014, 03:16 PM Reply Like
  • oil services guy2011
    , contributor
    Comments (128) | Send Message
     
    This stock is being propped up by the fallacy that this company will fill its capacity by a multiple of what they are currently have in permitting requests. Writers are correct that this happens all the time where C-level employees are grossly overcompensated. I have no problem with this guy being paid what he deserves but I think his compensation should be relative to the contracts in duration. Thus, if in 10 years from now the company is rightly valued at some fraction of its worth then he will get what is coming to him. But to pay a guy now for future income is just foolish and I am sick of CEO's and their crony boards telling investors that they have to be sure to retain their key talent. Hogwash!
    16 Jun 2014, 06:05 PM Reply Like
  • shenkerre@aol.com
    , contributor
    Comments (5) | Send Message
     
    Mr Souki was just lucky that his "mistake" didn't bankrupt the company.By serendipity all he had to do was reverse the spigot & voila he has a bonanza
    16 Jun 2014, 06:54 PM Reply Like
  • mapodga
    , contributor
    Comments (4095) | Send Message
     
    LNG is castle of the sands. The stock is more then 3 times over economic value.
    it doesn't matter what this guys from management will pool out. Whatever they take is undeserved
    16 Jun 2014, 07:27 PM Reply Like
  • buck1957
    , contributor
    Comments (40) | Send Message
     
    With the money that man has made me I'm not passing judgment. This company is five years ahead of any American competition. Visionaries are hard to come by! In his own words" if you don't make mistakes you are not driving fast enough" He is driving fast and making a lot of people a lot of money on the drive. The war is not over but he's sure winning a lot of battles guess when a few billion feet of lng is exported and the money is in the bank we can pas judgment. On the other hand if the fraccing revolution would spread world wide and the scheme would flop history will write a different ending . In any case he has his bases covered in either scenario I'm betting he makes a lot of people a lot more money.
    16 Jun 2014, 07:35 PM Reply Like
  • tealone
    , contributor
    Comments (294) | Send Message
     
    I don't know.....$1.6 BILLION just seems a "smidgen" beyond necessary to keep Souki's best interests at heart. I mean would he be non-appreciative and/or less efficient if it were only $1 billion? I suppose it's all relative but GOOD LORD, that's a lot of money!
    17 Jun 2014, 11:57 AM Reply Like
  • toptrotter
    , contributor
    Comments (120) | Send Message
     
    I'm all for capitalism, but this way to much compensation for a project that is not up and running.
    17 Jun 2014, 06:01 PM Reply Like
  • jolacious
    , contributor
    Comments (96) | Send Message
     
    RE Adullah, I think you are patronizing a fellow Arab. If it was not the support of dedicated shareholders, like myself and many others, where would Mr Soukie be today. Probably begging on the downtown streets of Lebanon. It was America that made him great, and I hope he has not forgotten that. I am an ordinary humble investor, I was late to the party. I think instead of rewarding himself and cronies excessively, why pay us long-term holders a special dividend or warrants instead. When does capitalism say enough is enough? We have to live (ordinary People) us well, do we not? The World was not made just for Mr Soukie and Cronies, was it?
    21 Jun 2014, 05:08 PM Reply Like
  • jolacious
    , contributor
    Comments (96) | Send Message
     
    Missed out the word 'want'
    21 Jun 2014, 05:11 PM Reply Like
  • jolacious
    , contributor
    Comments (96) | Send Message
     
    This action is like the sacking and rape of Rome by King Alric the Barbarian. I hope the powers that be STOP HIM RAPING OUR INVESTMENTS. Good Night.
    21 Jun 2014, 05:21 PM Reply Like
  • stary kozel
    , contributor
    Comments (130) | Send Message
     
    I personally know people who in the 90s worked in the startup for share options instead of cash, and ended with nothing, zero, zilch. Took the chances with the goal to make it big. It work both ways. Why don't you complainers go and bitch about FaceBook or Microsoft CEOs??
    30 Jun 2014, 01:13 PM Reply Like
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