GREENWICH, Conn., Feb. 3, 2017 /PRNewswire/ -- As a meaningful
stockholder of Simpson Manufacturing Co., Inc. ("Simpson" or the
"Company") (NYSE: SSD), Iron Compass Partners, LP, a fund
affiliated with Iron Compass LLC (collectively "Iron Compass")
remains highly concerned about the actions taken by the Board of
Directors of the Company (the "Board") over the last six months and
its reactive tactics in response to our efforts to improve
corporate governance.
On January 31, 2017 the Company
announced that it intends to hold a special meeting of stockholders
on or around March 28, 2017 – less
than a month before the previously-scheduled 2017 annual meeting –
to vote on amendments to the Company's bylaws and certificate of
incorporation that would: i) gradually de-stagger the Board; and
ii) eliminate stockholders' right to cumulate votes. While
the Company makes the suggestion in its press release that the
Board's action on these matters was the result of shareholder
feedback, a "commitment" to welcoming shareholder viewpoints, and
an effort to "enhance governance practices," stockholders should
know that it comes on the heels of a hard-fought effort by Iron
Compass to help the Company improve its corporate governance
profile – an effort the Board vehemently resisted.
We initially submitted a de-staggering proposal to be included
on the Company's 2017 proxy statement nearly three months
ago. For months, the Board spent Company and stockholder
resources opposing the validity of our proposal and attempting to
exclude the proposal from its proxy, in an effort to ultimately
deprive stockholders of the opportunity to vote on the
matter. Only after the Securities and Exchange Commission
rendered a response on the matter, effectively stating the Company
does not have a proper basis to exclude the proposal, is the Board
now calling a special meeting to pre-empt our de-classification
proposal and to limit shareholders' right to cumulate votes in what
appears to be a blatant defense tactic. These documents are a
matter of public record and can be viewed on the SEC's website.
http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2017/ironcompass012517-14a8.pdf
It is curious to us that the Company has decided to incur the
additional cost of a special meeting to vote on de-staggering and
removing cumulative voting after we sent a letter to the secretary
of the Company on January 19, 2017
indicating our intent to elect for cumulative voting. After
all, the Company could have simply allowed stockholders to vote on
de-staggering the Board and eliminating cumulative voting less than
one month later at the upcoming annual meeting of stockholders
scheduled to be held on April 24,
2017. We believe that the Board is attempting to eliminate
the right to cumulate votes at the 2017 annual meeting in an effort
to insulate itself from change. We do not believe that
eliminating cumulative voting represents good corporate governance.
In fact, ISS's 2016 SR U.S. Proxy Voting Guidelines recommend a
vote against management proposals to eliminate cumulative voting.
https://www.issgovernance.com/file/policy/2016-sri-us-voting-guidelines.pdf
In our minds, the Board's recent actions are another example of
how the Company's governance initiatives have only created an
appearance of reform. For example, on October 19, 2016, the Board voted to lower
outside director term limits from 20 years to 15 years and the
Company explained this change by stating that it was meant to
"facilitate refreshment and ensure a balance of
perspectives." However, despite the fact that the average
tenure of the current Board members is approximately 13 years, the
Board specifically exempted all existing directors from the term
limit. In other words, there is now no term limit for the
existing directors and the first time a term limit could be
enforced for any new director is the year 2032!
Taking steps to improve the Company's governance is critical to
reversing the Company's lagging performance and maximizing
shareholder value, and we remain committed to these goals for the
benefit of all stockholders.
About Iron Compass
Iron Compass endeavors to be a long term owner of 'classically
great' businesses. These are companies we believe have a
distinct competitive advantage that allows them to generate high
returns on invested capital, stable cash flow, and growth over the
long term. The greatest businesses seek to outperform
contemporaneously in both operations and capital management.
www.ironcompassinvestors.com
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SOURCE Iron Compass LLC