Texaco Will Elect 2 to Board in Bid to Help Fend Off Icahn
Texaco Inc., aiming to build support against New York financier Carl C. Icahn, said it would elect two new directors, one of whom was suggested by a large institutional shareholder.
The White Plains, N.Y.-based company said it will grant a seat to New York University President John Brademas, a candidate who had been suggested by the California Public Employees Retirement System, or CALPERS.
Analysts have said the support of such large institutional shareholders would tend to dilute Icahn’s chances of launching and winning a proxy fight for the company.
Icahn, who owns 16.2% of Texaco, has said he may push his own slate of directors. But since Texaco has granted a CALPERS nominee a seat on the board, analysts said Icahn may have less support from institutional shareholders if he launches a proxy contest.
Texaco stock, which had been boosted by speculation of an Icahn-led takeover, closed down $1.375 a share at $54.25 on the New York Stock Exchange.
Texaco President and Chief Executive James W. Kinnear said Texaco had held talks with CALPERS about the qualifications and criteria for board candidates. During those talks, CALPERS suggested 14 possible board nominees, including Brademas.
Another Nominee
“We share CALPERS’ enthusiasm for Brademas and are delighted our entire selection process has produced two superbly qualified candidates for the board,” Kinnear said.
Brademas will join the board later this month. In addition, nominee Charles H. Price will join the board in March after completing his tenure as the U.S. ambassador to Britain.
Texaco also said Lorene Rogers, retired president of the University of Texas at Austin and a Texaco director since 1976, would retire when her term ends this year.
Both Price and Brademas will stand for reelection at the 1989 annual meeting, increasing the board size by one to 15, if they win their seats.
Icahn failed in a proxy fight last year after the company won the backing of institutional shareholders such as CALPERS that were seeking greater say in the nomination of directors.
In an effort to boost profits, the company also underwent a $6-billion restructuring. As part of that asset sale program, it agreed on Friday to shed its 78% owned Texaco Canada Inc. for $3.24 billion.
