As we reported earlier, at its May 26 annual meeting, Chevron Corp. (CVX) denied entry to attendees with valid proxies. They had four of those individuals arrested for trespass. A fifth individual, who was admitted to the meeting, was subsequently arrested for trespass and disruption. To our knowledge, all the individuals denied admission were activists there to raise awareness about Chevron’s impact on the environment or treatment of local communities where the firm extracts natural resources.
It is deplorable that chevron would deny entrance to representatives of shareowners bearing valid proxies. It is shocking that they had some of those individuals arrested. What they should have done next was quietly have the charges dropped. Instead, they apparently working with the District Attorney’s Office of Harris County, TX, to see that the five arrested individuals went on trial, and to press for prison time for all five.
Last week, the sorry saga came to an end. As it turned out, charges were dropped against the individual who was admitted to the meeting. It would, after all, have been difficult to argue that someone who was admitted to the meeting was trespassing. The other four individuals, with limited financial resources and under the threat of prison terms or large fines, accepted plea bargains. They pled guilty, apparently to avoid the costs and considerable risks of going to trial.
This outcome is doubly disappointing because, over the past few months, the USPX has investigated and found that all the arrested individuals had valid proxies. Not only should they not have been arrested, but they should have all been admitted to the annual meeting.
As part of our investigation, USPX volunteers obtained and reviewed a number of sets of proxy credentials presented for admission at the Chevron annual meeting. Some of these were presented by individuals who were admitted. Others were presented by individuals who were denied admission. The latter included the credentials of the four who accepted the plea bargains.
All credentials we reviewed were legitimate and should have been sufficient to gain admission to the meeting. As far as we can determine, Chevron enforced no consistent standard for admitting or not admitting individuals based on their credentials. Admission decisions appear to have been made either arbitrarily or based on criteria unrelated to the credentials presented. We found instances where two people presented identical credentials; one was admitted, and the other was not. Following are some examples of our findings:
The Missionary Oblates of Mary Immaculate beneficially own 7,628 shares of Chevron stock in an account with Manufacturers and Traders Trust Company. Manufacturers and Traders Trust Company executed a legal proxy appointing the “Missionary Oblates of Mary Immaculate (beneficial owners) Represented by Henry Clark” proxy for those shares, “with full power of substitution”. The Missionary Oblates of Mary Immaculate combined this with their own legal proxy also naming Henry Clark to represent them at the annual meeting. Clark presented these at the annual meeting and was denied admission. His credentials were among the strongest we reviewed.
Margrit Vanderryn and Jack Vanderryn both beneficially own shares of Chevron and both decided to appoint representatives to attend the annual meeting on their behalves. They both obtained legal proxies from their financial institution, First Clearing. Because those legal proxies are form letters, their wording is identical. Both Vanderryns also executed proxies appointing their representatives. These too are identically worded. Margrit appointed Elias Isaac. Jack appointed Kenneth J. Davis. Isaac was admitted. Davis was not.
John, Mathew and Sarah Maher are all from the same family. All own shares of Chevron. All obtained legal proxies from UBS Financial so they could each appoint a representative to attend the annual meeting. All three were worded identically. John, Matthew and Sarah executed identical proxies appointing their representatives, Sergey Solyanik, Neil McKenzie and Juan Parras, respectively. Solyanik was admitted. McKenzie was denied admission. Parras was not only denied admission but was arrested for trespass.
The USPX was prepared to compile this evidence for presentation at trial. We were not involved with the activists’ decisions to plead guilty. However, those decisions ended our work on this matter.
While we do not have all the facts, the guilty pleas have the appearance of corporate executives wielding overwhelming financial and political resources to obtain an unjust end.