A major independent proxy advisory firm recommends that Gildan shareholders support the election of eight directors proposed by the American investment firm Browning West.
The recommendation from Institutional Shareholder Services (ISS) comes ten days before Gildan shareholders will be asked to vote at a meeting on the future of the governance of the Montreal clothing manufacturer.
A battle for control of the company was sparked in December after founder and longtime CEO Glenn Chamandy was suddenly fired over succession and strategy issues.
PHOTO PATRICK SANFAÇON, LA PRESSE ARCHIVES
Former Gildan CEO Glenn Chamandy
Several institutional shareholders quickly expressed their disagreement publicly and demanded the return to office of Glenn Chamandy. The American investment firm Browning West is the shareholder carrying the torch for the dissidents.
Browning West wants to reconstitute the board of directors in order to bring back Glenn Chamandy at the helm to replace Vince Tyra who became CEO this winter.
ISS believes that the reinstatement of Glenn Chamandy at Gildan must be considered “the key element of the case put together by the dissidents, including the action plan and the collective experience of the candidates for director positions proposed by the dissidents” .
ISS judges that the justification provided for the dismissal of Glenn Chamandy is “weak and inconsistent”.
“Glenn Chamandy’s decades-long track record seems much less complicated than the reasons to dismiss him. It is also clear that the members of the board of directors arrived at a choice which did not take into account the opinion of a significant contingent of shareholders who elected them, a sign that the priorities were perhaps not not be in the right place,” reads the ISS report released Friday.
“The dissident does not want a radical change in strategy or direction, but the reinstatement of a former manager with long experience as CEO of a public company,” it added.
At least two other independent shareholder advisory agencies – Glass Lewis and Egan-Jones – must take their turn before the May 28 meeting to inform Gildan shareholders.
Last week, the Caisse de dépôt et placement du Québec inserted itself into the saga that has been unfolding at Gildan for five months by revealing its intention to invest 200 million in the company, thereby supporting the board of directors. current administration of Gildan and its CEO Vince Tyra. However, as it does not hold Gildan shares, the CDPQ will not be able to vote on May 28.
In March, Gildan revealed that it was in talks with potential buyers. Executives subsequently indicated in April that the acquisition of the company continued to attract external interest and that the process was continuing.
With a market capitalization of just over $8 billion, Gildan is one of the 20 largest public companies in Quebec.