Welcome!

News Feed Item

Concerned Shareholders Submit Proposals for Board Reform at Sherritt International Corporation

HALIFAX, March 20, 2014 /CNW/ - Concerned Shareholders led by Clarke Inc. (TSX: CKI CKI.DB.A) today submitted four Shareholder Proposals designed to protect investors from further ill-considered acquisitions and to reform excessive and inappropriate compensation practices at Sherritt International Corporation ("Sherritt").

All Sherritt shareholders will have an opportunity to vote on the proposals at the Company's Annual and Special meeting to be held on May 6, 2014.

The Concerned Shareholders of Sherritt collectively own more than 5.0% of the outstanding common shares of Sherritt. Separately, on December 20, 2013, Clarke Inc., on behalf of the Concerned Shareholders, requisitioned a special meeting to allow Sherritt shareholders to vote on the removal of certain directors and their replacement by new directors who can better represent the interests of all the Company's shareholders.

"The proposals we have submitted today are all consistent with accepted best practices in Canadian corporate governance and are intended to help align the interests of Sherritt's Board of Directors with shareholder interests," said George Armoyan, President and Chief Executive Officer of Clarke Inc. "Particularly in the absence of true shareholder representation on the Sherritt Board, all of these steps should have been taken by the current Board of Directors on its own initiative, but it has failed to act."

The Shareholder Proposals will be included in Sherritt's Management Information Circular to be disseminated before the annual and special meeting. In summary, they are:

1. Approval of Acquisitions: Amend the Company's by-laws to require that any material acquisition must be unanimously approved by all Directors.

The Concerned Shareholders note Sherritt's dismal track record in capital allocation and lack of consistent strategic direction. One example is the coal business which was sold, reacquired and sold again, with the recent sale resulting in an impairment of $519 million and costing the shareholders approximately $1.75 per share. Similarly, the Board committed to spend $110 million on its Sulawesi nickel project only to abandon it as uneconomic three years later.

2. Director Compensation: Urge the Board to seek shareholder views on Director compensation through an advisory vote.

"Say on pay" for executive management is increasingly accepted as a right of shareholders. The Concerned Shareholders believe it is only logical to extend this concept to Boards of Directors since they are directly responsible to shareholders. It is particularly needed at Sherritt where, in 2012, the Directors were paid a total of $3.7 million which is an average of more than $400,000 per Board seat.  That is certainly among the highest director compensation in Canada and is almost twice the average of the companies Sherritt describes as its peers, most of whom are larger and more successful.

3. Executive Compensation: Urge the Board to seek shareholder views on executive compensation through an advisory vote.

The Chief Executive Officer at Sherritt was paid a total of $2,772,501 in 2012. That year, he led the Company to a 20% decrease in EBITDA and a 24% drop in cash flow from operations, significantly underperforming Sherritt's peers. The Concerned Shareholders believe compensation should be tied to performance. 

The current Board and Management own less than 0.25% of Sherritt's common shares and receive the great majority of their compensation as cash. They have effectively no financial interest in the success of Sherritt and their interests are not aligned with the interests of shareholders. The Concerned Shareholders believe the Board and Management should share in the risks as well as the rewards of the business.

4. Special Perquisites for Directors: Advise the Board to stop authorizing special perquisites for directors that do not align with shareholders.

Sherritt's Board paid itself more than $1.5 million in 2012 in compensation for restrictions to travel in the U.S. under the Helms-Burton Act, even though the majority of the current Directors have not been restricted from travelling to the U.S.

It is also simply inappropriate for shareholders to pay travel and other expenses for the spouses of Directors and management. It is a luxury an underperforming company cannot afford, particularly when the compensation paid to the Board and certain executives is already excessive and the spouses are not contributing to the direction of Sherritt. 

"Each of these proposals can help transform Sherritt from a private club, apparently run for the benefit of the Board of Directors, into a properly governed public company managed for the benefit of all its shareholders," Mr. Armoyan said.

The Concerned Shareholders also announced that they will, in due course, file a Proxy Circular describing their reasons for the need for change at Sherritt and the plans they will recommend to the Board.

This news release does not constitute a solicitation of proxies.

About Clarke Inc.

Halifax-based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance performance and increase its return. Clarke's securities trade on the Toronto Stock Exchange (CKI; CKI.DB.A); for more information about Clarke, please visit our website at www.clarkeinc.com.

Note on Forward-Looking Statements and Risks

This press release may contain or refer to certain forward-looking statements relating, but not limited to, the Company's expectations, intentions, plans and beliefs with respect to the Company.  Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements include, without limitation, those with respect to the future price and value of securities held by the Company, changes in these securities holdings, changes to the Company's hedging practices, currency fluctuations, requirements for additional capital, changes to government regulations, and the timing and possible outcome of pending litigation. Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements.

With respect to the Company's Investment segment, such risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, interest rates and foreign currency fluctuations and other factors. Other general risks and uncertainties include, among others, the sale of Company investments and subsidiaries, dividends are not guaranteed, share liquidity, reliance on key executives, environmental considerations, use of information technology and information systems, commodity market risk, risks associated with investment in derivative instruments and other factors.

Although the Company has attempted to identify important factors that could cause actions, events or results not to be as estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, the Company does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

SOURCE Clarke Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
Enterprise networks are complex. Moreover, they were designed and deployed to meet a specific set of business requirements at a specific point in time. But, the adoption of cloud services, new business applications and intensifying security policies, among other factors, require IT organizations to continuously deploy configuration changes. Therefore, enterprises are looking for better ways to automate the management of their networks while still leveraging existing capabilities, optimizing perf...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, will explore the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences betwee...
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
In the rush to compete in the digital age, a successful digital transformation is essential, but many organizations are setting themselves up for failure. There’s a common misconception that the process is just about technology, but it’s not. It’s about your business. It shouldn’t be treated as an isolated IT project; it should be driven by business needs with the committed involvement of a range of stakeholders.
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 18th International CloudExpo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.