Cheniere Energy Inc (LNG)

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7/1/14 11:44:00: Cheniere Energy Cancels Proposed Compensation Plan

Cheniere Energy Inc. is dropping its plan to issue 30 million shares to pay employees after running into investor opposition, according to court records.

The company, which aims to export U.S. natural gas beginning next year, said in Delaware court filings dated June 23 it would withdraw two proposals on employee and executive pay packages it had submitted for shareholder approval. The pay plan would have set aside shares worth $2.15 billion at yesterday's closing price, and awarded them based on increases in Cheniere's stock-market value.

Cheniere didn't immediately respond to a request for comment.

Cheniere made the disclosure in response to shareholder lawsuits that claim the company improperly awarded previous stock grants to employees in 2013. The plaintiffs sought to block the company from voting on any new compensation plan at its annual meeting in June, prompting Cheniere to postpone the vote just days before it was scheduled. That meeting is now set for Sept. 11 .

The company has moved to dismiss the shareholder complaint, defending the past stock grants as proper and the new grants as necessary to motivate and retain employees.

Jeffrey Golan , a lawyer representing shareholders against Cheniere, said the company's moves to postpone the vote and withdraw the pay proposals "reflects that it was aware of the incorrect voting procedures employed on a questionable compensation plan for the top executives at Cheniere."

Cheniere's shares are up 70% so far this year, giving it a stock-market value of more than $16 billion .

The red-hot stock performance has also led to big payouts for executives, including a $142 million package for Chief Executive Charif Souki last year that made him one of America's most highly paid corporate bosses. Several firms that advise institutional shareholders on how to vote opposed the plan to issue more equity for compensation.

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(END) Dow Jones Newswires
07-01-14 1344ET
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