(Montreal) Gildan’s bitter leadership battle has cost the company at least US$65 million, according to its new CEO.
“This is probably the biggest proxy fight in history, even bigger than Disney, for example, which is 40 times our size,” Chairman and CEO Glenn Chamandy said. a reference to a highly publicized clash within the entertainment company in recent years.
The T-shirt maker’s shareholders voted Tuesday to reinstate Mr. Chamandy to its board alongside a slate of candidates put forward by activist investors, ending a months-long battle over the company’s leadership. business.
The election is another vote of confidence for Glenn Chamandy, who returned to the helm of the company last week after being ousted from his top post last year amid accusations that he was no longer fit to run the business.
Mr. Chamandy told reporters in Montreal on Tuesday that the conduct of Gildan’s board of directors in recent months demonstrated “poor judgment” and had been a stressor for him, his family and the company’s employees. .
“I was a little saddened, I would say, by the way the board handled the succession — and handled my particular situation,” he said.
Activist shareholders, including Browning West, have been pushing for Mr. Chamandy’s return as CEO of the Montreal-based clothing maker for months after a former Fruit of the Loom executive, Vince Tyra, took over. position as CEO of Gildan.
In a stunning move last week, the Gildan board and Mr. Tyra resigned, paving the way for Mr. Chamandy’s return and the election of Browning West’s slate of directors.
Mr Chamandy said the new board slate had received “overwhelming support” from shareholders. The final results will be known Wednesday morning, he said.
The $65 million includes severance payments for outgoing board members and two executives, the company’s sale process – since abandoned – and legal costs, including two lawsuits filed by Gildan against the investor activist Browning West, rejected earlier this month, Chamandy said. That doesn’t include his severance package, which he says he never received.
“That board was very entrenched and I think they misused a lot of shareholder money,” he said of the former executives.
About US$26 million of the total US$65 million went to Mr. Tyra, who led the company for four months, and Arun Bajaj, Gildan’s former head of human resources, Mr. Chamandy said. who described his predecessor’s compensation as “shocking”.
Nonetheless, Mr. Chamandy suggested that legal recourse is unlikely: “We are putting this behind us. »
Leading proxy firms Institutional Shareholder Services, Glass Lewis and Egan Jones have all recommended the election of Browning West nominees.
In April, Gildan previously replaced five directors and announced it would support two candidates from Browning West.