Advisory firm ISS urges Monro shareholders to vote against board members
03/08/2022 21:35
By Svea Herbst-Bayliss
BOSTON, Aug 3 (Reuters) - Monro Inc MNRO.O shareholders
should vote against all five of the auto service company's
directors who are up for election after the board failed to
follow investor wishes and restructure its share classes,
shareholder advisory firm ISS said on Wednesday.
Institutional Shareholders Services, known as ISS, said the
board "demonstrated insufficient responsiveness to last year's
majority-supported shareholder proposal" and that "withholding
support from all director nominees is warranted."
Shareholders will vote on Aug. 16. Many investors follow ISS
recommendations on votes ranging from who will sit on the board
to corporate matters like acquisitions.
Monro's board has nine members. Five are up for election
this year.
Hedge fund Ides Capital, which has been pushing the company
for years to make changes, submitted last year's shareholder
proposal to recapitalize the share classes so that each share
would have one vote in each voting situation.
Eighty-eight percent of common shareholders supported the
proposal at the 2021 annual meeting. While the board
"acknowledged the results ... and engaged with shareholders on
the issue," ISS wrote that the board did not act because it felt
it did not have the "right or power to unilaterally
'recapitalize' its equity capital structure to eliminate the
Class C Preferred Stock.
All Class C shares are owned by investment banker Peter
Solomon, who sits on the board and is one of the company's top
five shareholders after mutual fund companies BlackRock, T. Rowe
Price, Vanguard and Wasatch Advisors.
Shares of Monro, which runs auto service and tire centers
and has a market capitalization of $1.7 billion, have dropped by
15% in the last 52 weeks.
Monro did not immediately respond to a request for comment.
Ides Capital could not be reached.
(Reporting by Svea Herbst-Bayliss in Rhode Island
Editing by Matthew Lewis)
((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))