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By Svea Herbst-Bayliss
BOSTON, July 10 (Reuters) - Two brothers have won control of the board of directors of natural gas producer EQT Corp, and one of them, Toby Rice, is expected to be named chief executive officer later on Wednesday, the company said.
Shareholders ranging from mutual fund group T. Rowe Price Group Inc to pension fund CalSTRS elected all seven Rice Team nominees as directors as well as five nominees supported by both Rice and EQT, the company said in a statement.
“The newly constituted Board will meet later today and is expected to name Toby Z. Rice as President and CEO, succeeding Robert McNally,” the statement added.
The vote ended an eight-month campaign against the EQT board and management during which the Rice brothers claimed they had mismanaged the company since the brothers sold them natural gas and oil firm Rice Energy in 2017.
The board is also expected to name John McCartney, a former board member of Rice Energy, as its chairman, a person familiar with the matter said on Wednesday.
Robert McNally, who will be replaced as CEO, at times choked back tears while conducting the annual meeting in Pittsburgh on Wednesday, according to a person who was in the room.
It was one of the biggest fights for corporate board control since Starboard Value won its proxy contest at Darden Restaurants Inc in 2014.
Toby and Derek Rice have been frustrated with operations at EQT and decided their only recourse was to press ahead with a proxy battle and for Toby Rice to replace McNally as chief executive officer.
While a number of prominent shareholders had publicly declared their support for the Rice team early, proxy fights are often decided when the large index funds that own large stakes vote. BlackRock and State Street both sided with the dissidents, having voted late Tuesday, according to a person familiar with the voting.
Vanguard was the only large shareholder to use the universal proxy card, picking several people off the Rice slate and voting for others from the EQT slate, the source said.
Toby Rice told Reuters last month that he needed more influence on the board to make changes such as cutting costs and bringing in new executives to run key business after EQT let most of Rice Energy’s senior management go after the merger.
EQT energy shares rose 2.3% at $16.02 early Wednesday. The stock price has tumbled nearly 59% since the Rice merger was completed, sparking worry among big investors and at least one influential proxy advisory firm. (Reporting by Svea Herbst-Bayliss Editing by Jeffrey Benkoe)