Representatives from the Chinese side say they think it likely that Chinese President Xi Jinping will attend the G-20 meeting later this month. But in order to reach a trade...China Economyread more
Software engineers straight out of college often make six-figure salaries, not counting equity compensation.Technologyread more
Wall Street, though, is clamoring for a rate cut, with an 85% chance of a move in July and a 61% probability of three reductions by year's end.The Fedread more
A company spokesperson said the outage was the result of a "an internal technology issue" and was not security related.Retailread more
Using MIT's living wage calculator, CNBC Make It mapped out the minimum amount a single parent must earn to meet their basic needs without relying on outside help in every...Earnread more
The flattening of the yield curve is exuding a bad omen for the stock market if history is any guide.Marketsread more
Hong Kong Chief Executive Carrie Lam announced at a press conference on Saturday that a contentious bill to allow extraditions to mainland China has been put on hold.China Politicsread more
Stratolaunch, the world's largest airplane, which flew once, is up for sale, sources familiar told CNBC.Investing in Spaceread more
Transparency is key… or is it? With the first-ever non-transparent, actively managed exchange-traded fund receiving approval from the SEC, "ETF Edge" goes straight to the...ETF Edgeread more
Mired in a crisis over its best-selling 737 Max plane, Boeing could hand the spotlight over to its rival Airbus at the Paris Air Show.Airlinesread more
A new update to the Apple Watch called watchOS 6 will notify you if the environment you're in is too loud and could damage your hearing.Technologyread more
Hedge fund manager Barry Rosenstein on Monday turned up the pressure on EQT, accusing the natural gas driller of putting executive compensation ahead of shareholder value in its proposed acquisition of Rice Energy.
Rosenstein, founder and managing partner at Jana Partners, has come out against the $6.7 billion deal, which would create the nation's largest natural gas producer. Earlier this year, he said the transaction would cost more than the savings EQT would achieve by combining its exploration and production and pipelines businesses with Rice's operations.
On Monday, he alleged that EQT may be pursuing the "value-destructive acquisition" in order to enrich its executives.
"EQT's perverse compensation structure in fact incentivizes management to pursue this suboptimal, dilutive acquisition, no matter the cost to EQT shareholders," Rosenstein wrote in a letter to EQT's board of directors filed with the Securities and Exchange Commission.
Rosenstein says that the company's average oil and gas production over three years has a significant impact on management's long-term incentive pay, which makes up the largest part of its compensation.
Since the growth is not measured on a per share basis, Rosenstein claims management can drive up its payout by acquiring new production volume, even if it means diluting the value of its shares to purchase Rice's wells with stock, which Rosenstein believes is undervalued.
Jana Partners holds a 5.8 percent stake in EQT.
EQT's compensation structure encourages managers to make decisions that will increase total shareholder return, EQT spokesperson Natalie Cox said in a statement. She noted that 98 percent of shareholders who cast votes at EQT's last annual shareholder meeting approved the pay program.
The company believes the Rice purchase will generate at least $2.5 billion — and potentially an additional $7.5 billion — in savings, primarily by combining capital spending programs and reducing administrative costs.
"EQT's Board of Directors and Management team remain fully committed to the Rice transaction, which we believe is in the best interest of all shareholders and will deliver significant long-term shareholder value," Cox told CNBC.
The proposed Rice acquisition would help EQT executives achieve the type of production growth they need to deliver in order to receive their maximum annual payout, Rosenstein claims.
EQT's purchase of Rice would significantly add to its assets in the Marcellus and Utica shale regions, which account for much of the growth in U.S. natural gas production. Demand for natural gas is on the rise as more domestic power plants burn the fuel and a number of liquefied natural gas export terminals are slated to open in the coming years.
Rosenstein believes a spinoff of EQT's midstream business, which owns and operates pipelines, would better benefit shareholders. However, he thinks management is opposed to this option because it would remove a "large, stable, and growing" driver of cash bonuses paid out to management for hitting annual earnings targets.
He acknowledged that total shareholder return plays a part in EQT executive compensation, but says this part of the payout structure is "largely insensitive to actual share price changes."
Rosenstein is on something of a hot streak this year, having made a profit of $300 million on shares of Whole Foods after the grocery retailer reached a deal to be sold to Amazon. Rosenstein had advocated for such a sale.