Investors call on Texas Pacific Land trustees to address corporate governance
SoftVest, Horizon Kinetics and ART-FGT Family Partners, which collectively beneficially own over 25% of the outstanding shares of Texas Pacific Land Trust, issued an open letter to David Barry and John Norris, two of the Trustees of TPL, urging them to share their thoughts on corporate governance and the rights of TPL beneficiaries with all TPL shareholders. The letter read in part, "Amidst all of the controversy, perhaps we can use the most recent incidents as a basis to have a respectful open discussion of your conception of corporate governance. As an example, your recent disclosure of the airplane purchased by the Trust is ultimately only an issue because of the lack of disclosure and transparency to shareholders. Surely, you will admit that the purchase of a plane is a departure from past practice. Consequently, many would assert that it is no more reasonable to disclose a departure from past practice. It is mathematically possible that a plane can be a good investment if used with sufficient intensity. We all know the price of a round-trip ticket from Dallas to Midland, so if, to continue the point, you release the information regarding costs and expenses relating to the plane, all TPL beneficiaries would be able to calculate whether or not an aircraft is a sensible and reasonable use of capital. While, in a vacuum, we agree with Institutional Shareholder Services, that given the size and complexity of the Trust, $104,000 per year in compensation for a Trustee seems reasonable, the Trust is operating under a Declaration of Trust document that is 131 years old and makes no provision for increasing the fixed compensation of $2,000 per year for Trustees. How could you unilaterally decide to modernize your own compensation without court or shareholder approval and not modernize all facets of corporate governance? The primary role of fiduciaries is to put the interests of beneficiaries above their own, yet you appear to not even acknowledge our right of inspection that is unambiguously included in the Declaration of Trust. Accordingly, we call on you to state in an open letter to all TPL beneficiaries your conception of corporate governance and your conception of the rights of TPL beneficiaries, including the right to inspection."