DRUMMONDVILLE, Que. – CVTech Group Inc. (TSX:CVT) says an independent advisory service recommends rejecting a slate of director nominees proposed by a former senior executive and to vote in favour of the industrial service company’s incumbent board.
The recommendation from Glass Lewis & Co., which advises institutional investors on how to cast their proxy votes, comes ahead of a May 30 meeting of CVTech shareholders. The deadline for proxy votes is May 28.
In a May 14 regulatory filing, dissident shareholder and retired senior executive Guy Aubert said there needs to be a change of leadership at the company due to a decline in its market value since 2005, when Aubert received shares as partial payment for his ownership stake in Thiro Ltd.
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Thiro, now called Thirau, became a major part of CVTech’s business. Thirau provides a variety of services to the electric power industry. For instance, it recently received a two-year contract from Hydro-Quebec to install utility poles and build transmission lines.
Aubert, who was chief operating officer of CVTech until his retirement from that position in 2010, currently owns nearly 10 million shares or 13.8 per cent of CVTech’s outstanding stock – making him its second-largest shareholder. He is also a director on the company’s board.
According to excerpts of the Glass Lewis report provided by CVTech, the advisory firm concludes there is merit in some of Aubert’s arguments, but that the company’s shortcomings don’t warrant a sweeping change of the board.
“We find even less impetus for such turmoil considering that the Dissenting Shareholder has, himself, been positioned for nearly seven years to directly influence, through his extensive board and executive service and significant shareholding, virtually every issue subject to his critique,” Glass Lewis says.
It adds that the incumbent board also supports Aubert’s re-election as director, giving him continued influence on the company’s strategic direction.
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