Proxy Advisor Backs Parkland's Board Slate
CALGARY, Alberta — Independent proxy advisory firm Institutional Shareholder Services Inc. (ISS) announced support for Parkland Corp.'s slate of preferred directors, pushing back on shareholder Simpson Oil Ltd.'s call for sweeping changes to the board.
According to ISS, Simpson has failed to meet the high bar necessary to justify a control slate. Additionally, the firm noted that Simpson's plan is "light on details regarding capital allocation and which businesses would be potential divestitures, where specific cost savings would be identified and what a potential timeline for realization would be."
This makes it difficult for shareholders to objectively assess execution of the plan, should Simpson be successful, the firm added.
[Read more: Parkland Reaffirms Its Support of Board & Strategic Review Process]
ISS recommended withholding support from Simpson nominee Mark Davis, who is also the shareholder's proposed interim CEO, and endorsed Parkland's recent strategic initiatives, including its ongoing strategic review and its comprehensive CEO search following President and CEO Bob Espey's announcement that he will step down after 15 years leading the company.
The recommendation came just a day after another independent proxy advisory firm, Glass, Lewis & Co., recommended that Parkland shareholders vote for seven out of Simpson's nine director nominees. The firm cited what is called "persistent underperformance" and "repeated financial and strategic execution challenges over multiple years" as reasons to support stronger board oversight.
"With a CEO succession process and strategic alternatives review now running concurrently, it is essential that the board overseeing both be viewed by shareholders and the market as credibly independent, compositionally balanced, and strategically focused," Glass Lewis wrote. "Against this backdrop, we believe that a majority refresh is necessary to realign board composition with shareholder expectations and to ensure credible, shareholder-focused oversight of these critical processes."
Simpson, which holds 19.8% of outstanding common shares of Parkland, has frequently clashed with company leadership in recent years and claimed that its two board members were deliberately excluded from key discussions and denied any real influence.
However, Parkland pushed back, recently dismissing Simpson's board slate as "clear attempt by a minority shareholder to seize full control of Parkland without offering a control premium to its fellow shareholders, according to Executive Chair Michael Jennings, who emphasized the independence and experience of Parkland's current board.
Calgary-based Parkland Corp. is an independent supplier and marketer of fuel and petroleum products and a convenience store operator. Parkland currently services customers across Canada, the United States, the Caribbean region and the Americas through three channels: retail, commercial and wholesale.