Influential shareholder group PIRC calls into question Schlumberger’s ability to cover proposed dividend payout ahead of oil firm’s annual meeting
The influential shareholder group PIRC has called into question Schlumberger's ability to cover a proposed dividend payout ahead of the oil firm's annual meeting.
In an alert today PIRC said that Schlumberger's proposed cash dividend of $2 per ordinary share "is not covered by earnings", and recommended that shareholders cast an "oppose" vote on the group's financial statements and dividend declaration.
The recommendation comes a week after the Dutch oilfield services firm announced its pre-tax profit fell by 38 per cent in 2015. Year-on-year revenue fell by 27 per cent, while its pretax operating income fell by 22 per cent from $7.7bn (£5.4bn) to $6bn.
Oil companies have suffered from the fall in global oil prices that has seen the price of Brent crude plummet from over $100 a barrel in July 2014 to around $40 at present. The energy industry has recently been warned that high supply and slowing demand remain a risk to price stabilisation, despite Brent crude and West Texas Intermediate (WTI) prices increased slightly after producers announced a meeting will be held in mid-April to discuss an output freeze.
PIRC has also recommended a number of "oppose" votes for board representatives. It recommends non-executive directors Nikolay Kudryavstev, Michael E Marks, Tore I Sandvold and Leo Rafael Reif be voted against.
An oppose vote is also recommended for Henri Seydoux, who is being considered as an independent non-executive director, as he "has family ties to the founding Schlumberger family".