With Nod to Taubman’s ‘Incremental’ Relocate to Enhance Business Governance, Land and Buildings Vows to Continue Fight for Shareholder Responsibility in Federal Court
Taubman Centers, Inc.(NYSE: TCO)this morning announced that investors voted to elect CEO Robert S. Taubman and 2 other company candidates to the board of directors, reversing a challenge by activist hedge fund Land and Structures, which nominated a different slate of board prospects.
The shopping center REIT’s proxy solicitor recommended that, according to preliminary results of the yearly election, shareholders voted to elect Taubman, Cia Buckley Marakovits and Myron E. Ullman III to the board at the Bloomfield Hills, MI-based company’s yearly shareholders fulfilling early today. Land and Structures Financial investment Management had actually put forth co-founder Jonathan Litt and corporate governance expert Charles Elson as nominees.
In a declaration, Taubman Centers stated its board and management group values “the open dialogue and input we have actually received from our investors, and we eagerly anticipate continuing to engage with financiers in our continuous efforts to deliver superior long-term shareholder value.”
Taubman last month asked its shareholders to reject the slate of directors nominated by Land and Structures, which owns 1.2% of Taubman stock and sought to replace Robert Taubman and lead director Myron E. Ullman III on the board.
Land and Structures hedge fund co-founder Jonathan Litt, (right) sought to oust Taubman President, Chairman and CEO Robert “Bobby” Taubman in a battle for control of the shopping center REIT’s board of directors.
Under the existing board and management, “Taubman has put together an exceptional portfolio making up some of the very best properties in the industry and has provided remarkable go back to shareholders.”
The at-times controversial disagreement between the shopping mall owner and hedge fund might now relocate to the courts. Stamford, CT-based Land and Structures stated in a declaration that it plans to pursue litigation to limit the Taubman household’s control of the company, and that preliminary ballot shows that shareholders not aligned with the family supported the activist group’s proposed changes.
“Although Taubman announced that all of its directors were re-elected at the annual conference, a majority of non-Taubman household shareholders supported Land and Buildings nominees,” Litt’s company stated. “This consisted of near-unanimous assistance from active supervisors. We believe this highlights the immediate need for new voices in the company’s boardroom.”
Taubman’s stock rate declined as much as 2.5% to $59.74 in late early morning trading following the statement. A Keybanc analyst had actually forecasted that a shareholder vote to remove Taubman and Ullman from the board would have a favorable influence on the REIT’s shares.
Litt said that if the Taubman household’s voting position was restricted to 8.23%, as the hedge fund believes it lawfully should under the business’s charter, the two activist candidates would have been elected to the board. The hedge fund stated it will move on with lawsuits versus Taubman Centers filed in U.S. District Court in Michigan.
“As long as the Taubman family’s 30% voting interest persists, shareholder voices will never ever be genuinely heard,” Litt said in the declaration.
Preliminary election results more suggest that shareholders approved all the business’s other proposals at the yearly meeting, consisting of annual advisory votes on executive settlement for Taubman officers and approval of KPMG LLP as the company’s accounting company for 2017.
Taubman said in a release that the business will deal with business governance problems by transitioning to annual director elections to refresh the board “no later than the 2018 yearly meeting.”
Land and Structures offered credit to the business for the “incremental actions” taken as an outcome of the general public proxy battle, consisting of the consultation of a lead independent director, the addition of board member Cia Buckley Marakovits, Taubman’s promise to “refresh” the board through annual director elections.
While Litt views the changes as inadequate to secure the rights of Taubman investors, “they at least reflect the impact that shining a spotlight on bad business governance and oversight can have.”