Securities and Exchange Commission Chairman John S. R. Shad told a Senate subcommittee yesterday that his agency opposes new proposals to curtail corporate takeovers.
He objected to last-minute amendments to a pending takeover bill by Sens. John H. Chafee (R-R.I.), Howard M. Metzenbaum (D-Ohio) and Arlen Specter (R-Pa.). Their proposals would extend the tender-offer period from 20 to 60 days, require anyone buying 20 percent of a company to make an offer for all of the stock, require corporate board members to own at least 1,000 shares of stock in a company and restrict defensive tactics management can use to avoid takeovers.
Shad said the SEC must remain neutral in corporate takeover fights and objects to any legislation that would favor either a company's existing management or someone seeking to take it over. He said he opposes some of the provisions because they would amount to the federal government taking authority away from states.
Testifying in favor of a minimum stock ownership for corporate directors was T. Boone Pickens Jr., chairman and president of Mesa Petroleum Co. of Amarillo, Tex. Pickens has been involved in several raids on oil companies. His unsuccessful try to take over Gulf Oil Co. in 1982 resulted in a $45 million profit for Mesa.
Pickens said that, during the Gulf episode, he discovered the three top officials of Gulf owned less than one-tenth of 1 percent of the outstanding shares of the company, and the ownership of the board of directors amounted to less than three-tenths of 1 percent. By comparison, Mesa's board owns 4 percent of its stock.
"When board members and officers do not have a personal stake in their companies, they often act merely as caretakers for management, more interested in perks and power than with shareholder values," he said. Pickens concluded that his raid on Gulf, and its subsequent takeover by Socal, put the oil company's assets in stronger hands and therefore benefitted the shareholders.