By Braden Reddall
May 13 (Reuters) - Transocean Ltd said on Mondaythat Chairman Michael Talbert will step down later this year, ina move that comes just days before the culmination of a fightbetween the offshore driller and investor Carl Icahn in whichTalbert was a target.
Talbert, a director since 1994 who was also chief executivefrom 1994 to 2002, told the board that if re-elected at theupcoming shareholder meeting on May 17, he will step down aschairman by November and leave the board no later than the 2014annual meeting, Transocean said.
Icahn, who owns 5.6 percent of Transocean, has opposedTalbert's re-election. The activist investor has beencampaigning for a higher dividend payout for months and iscalling for major changes to the Switzerland-based company'sboard ahead of the annual meeting.
"We find it to be utterly absurd that a Chairman facing theprospect of losing his directorship would be so brazen as to askshareholders to return him as Chairman so that he and the Boardcan then pick his successor," Icahn wrote in a letter toTransocean shareholders on Monday.
Talbert's exit strategy caps a tumultuous meeting season forlong-serving bosses in the energy business. On Friday, John Hesswas stripped of his chairman duties at Hess Corp, just aweek after Occidental Petroleum Corp Chairman Ray Iraniwas voted out after two decades at the top.
Icahn has gone after Transocean over "ill-advised" mergersand "unsuccessful" development strategies. Over the past fiveyears, its shares dramatically underperformed rivals Ensco Plc and Noble Corp - even before the 2010 Gulf ofMexico oil spill following a deadly Transocean rig accident.
Transocean grew out of a series of mergers that started withthe purchase by Alabama-based Sonat Offshore Drilling ofNorway's Transocean ASA in 1996. Three years later came thetakeover of Sedco Forex, spun off by oil services giantSchlumberger, before a blockbuster deal withGlobalSantaFe in 2007 created the current industry leader.
Icahn wants the company to replace three directors,including the chairman, with his nominees John Lipinski, JoséMaria Alapont and Samuel Merksamer.
Transocean has responded by questioning theirqualifications, saying Alapont and Merksamer have no apparentenergy experience while Lipinski leads a U.S. refiner - a sideof the oil business far removed from exploration.
Transocean also notes that Icahn, in his successful battleto take over the board of refiner CVR Energy Inc lastyear, had criticized Lipinski's track record, and thatshareholder advisory firm ISS did not back him for Transocean'sboard - even though it approves of Merksamer and Alapont.
Apart from Talbert, the two directors in Icahn's sights areThomas Cason and Robert Sprague. Cason had been a GlobalSantaFedirector, and previously worked at oilfield services companyBaker Hughes Inc. Sprague has been a director since 2004after a long career at Royal Dutch Shell Plc.
Icahn has said he holds the directors responsible for thevalue destruction brought about by the takeovers of old assetswhile rival Seadrill was investing in new rigs.
"We believe that directors Talbert, Sprague and Cason haveproven themselves incapable of delivering returns, andtherefore, they should be replaced," Icahn wrote on Monday.
Transocean is in the process of shaping up its sprawlingglobal operations. It has promised to cut $300 million of costsby next year, on top of planned reductions of about the samethis year from the 2012 operating and maintenance cost figure of$6.1 billion.
Shares of Transocean were down more than 1 percent at $53.94on Monday. The stock has declined by 65 percent in the past fiveyears, compared with a 33 percent drop for Noble and an 8percent slide for Ensco. Seadrill is up 38 percent in that time.