Advisory firm ISS urges Monro shareholders to vote against board members (updated)
04/08/2022 16:11
(Adds Monro's response)
By Svea Herbst-Bayliss
Aug 3 (Reuters) - Monro Inc MNRO.O shareholders should
vote against all five of its board directors because the U.S.
auto service company did not take action to loosen the grip of
its controlling investor, shareholder advisory firm ISS said on
Wednesday.
Eighty-eight percent of Morno's common shareholders
supported a proposal last year to give each share in the company
one vote. This would strip investment banker Peter Solomon, who
owns just 2% of Monro, of his supervoting shares that allow him
to control the company.
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.".
In a statement, Monro reiterated that it could not change
its share structure without Solomon's consent. "We strongly
believe ISS has reached the wrong conclusion in its report and
that shareholders should vote in favor of all Monro directors
standing for election at the upcoming annual meeting of
shareholders," the company said.
Shareholders are scheduled to 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 change the company's structure so that each share
would have one vote in each voting situation.
Ides has also told Monro it should form a strategic board
committee to engage with potential buyers. If Solomon blocks a
sale by asking for more than what bidders offer, Monro should
disclose this in accordance with its obligations under
securities laws, according to Ides. urn:newsml:reuters.com:*:nL1N2YU22A
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.
(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))