Teemco

[wsucougz]

Super generous and over use of corporate jet, he might have even had SR buy one, cant remember.

-SandRidge provides him with unlimited personal use of the companyÂ’s four corporate jets
-Mr. Ward has used the planes for frequent trips to his vacation home in Scottsdale and weekend
trips to Las Vegas, Los Angeles and the Bahamas
- The planes include a Falcon 900EX, one of the most expensive private business jets made
-SandRidge employs over 15 full time employees to maintain and fly the jets

Lots of other crazy allegations that I cant remember.

Given the importance of corporate governance, we thought we would highlight a few of the
compensation and self-dealing issues that we find most disturbing:

• The Board has sanctioned compensation levels for Tom Ward that are unconscionable in light of
company performance. For example, total compensation for 2011 was over $25 million -
representing a full 1/2 of the companyÂ’s earnings. In fact, CEO compensation has been
between $15 and $26 million in every year since the companyÂ’s IPO. This is simply astonishing,
considering 1) the stock has declined 76% over this period, 2) the relative stock performance has
been in the bottom 1% of all major US listed stocks, and dead last among energy companies,
and 3) Book Value per Share has declined by over 60% over this period. In fact, when
compensation is adjusted for market capitalization of the company, the figures become even
more appalling – relative to market capitalization, Tom Ward has been the single highest
compensated CEO among all energy companies, and among the highest compensated CEOs in
AmericaÂ…despite destroying more shareholder value than 99% of other companies and CEOs.

• The company has been rife with self-dealing, at the expense of shareholders and for the benefit
of Mr. Ward. The most disturbing example has been the Executive Well Participation Plan,
(similar to the founder well participation policy at Chesapeake Energy that caused enormous
outrage earlier this year). When concerns regarding Mr. WardÂ’s ties to Chesapeake Energy
arose this spring, Mr. Ward repeatedly asserted to us, other shareholders, and the media that
SandRidge was different, and that over time he and the company recognized the
inappropriateness of this practice, and eliminated it to avoid any appearance of impropriety.
We investigated his claims, and were appalled by what we found.
It is true that SandRidge has eliminated their Executive Well Participation Plan. However, they
did so immediately after the market collapse in October 2008, by then paying over $67 million
to Mr. Ward, even as 1) markets were collapsing, and 2) the company had less than $1 million in
cash and was facing real risk of bankruptcy. Adding insult to injury, the wells that the company
re-purchased from Ward were natural gas wells, even as Mr. Ward and the company were
publicly proclaiming the need to abandon their natural gas focus and shift towards oil
exploration and development. When the company disclosed the purchase, it cited a desire "to
retain a greater working interest in future wells, thus increasing proved undeveloped reserves".
This declaration was preposterous, considering their publicly stated desire to abandon the initial
natural gas focus of the company and switch to oil. And, again, it was even more shocking when

one considers the environment of that time – with markets collapsing, the company facing
collapse, and natural gas facing collapse. When the Executive Well Participation Plan was
initially established, the claimed purpose was to “align executives’ interests with that of
shareholders”. It is quite obvious that the only purpose was to enrich management at the
expense of shareholders.
What has Mr. Ward done with his wealth, including the $150 million in payments from
SandRidge? He has bought massive holdings of ranchland, and then turned around and leased
the land to SandRidge for future exploration. Therefore, some payments to Mr. Ward continue
– they have simply changed form. Cashing out of natural gas wells in October 2008 was a
spectacular trade, as was swapping into ranchland in the Midwest Â… unfortunately at the
expense of SandRidge shareholders who suffered massive write-downs on the well interests
purchased from Mr. Ward. There are also numerous smaller, but equally disturbing, other
examples. Mr. Ward purchased a sizable interest in the Oklahoma City Thunder basketball
teamÂ…only to yet again turn around and have SandRidge pay him and other owners millions per
year in sponsorship and luxury suite payments. Despite its small size, SandRidge is one of the
largest corporate supporters of the Oklahoma City Thunder and the company that owns it.

** This is all from the TPG-Axon filings