Corporate proxy contests aren’t quite like voting in a primary or general election. Shareholders at Media General are receiving ballots for the April 24th election of directors, but there are dueling ballots, with neither listing all of the candidates.
The company itself is sending out proxy ballots to holders of the publicly traded Class A stock with only the names of the three existing directors running for reelection: Charles A. Davis, Rodney A. Smolla and Walter E. Williams. There is also a note to shareholders headed "***CAUTION***" warning that they may also receive a proxy card from Harbinger Capital Partners seeking their votes for the hedge fund’s three nominees. "The board does not believe this is in the company’s best interest and strongly urges you not to sign any proxy cards sent to you by Harbinger," says the note to shareholders from Media General’s board of directors.
Harbinger’s own proxy has not yet been filed with the SEC, but it presumably will list only its three nominees: Eugene I. Davis, F. Jack Liebau Jr. and J. Daniel Sullivan. So, shareholders not only have to pick whom to vote for, but also which ballot to cast.
Actually, there are even more ballots. Holders of the super-voting Class B stock, which is not publicly traded, get a different ballot to vote for a slate of six directors, including CEO Marshall Morton. And employees participating in the Media General 401(k) plan get a different ballot to also vote on the Class A directors.
TVBR observation: Harbinger can’t take control of Media General, since only one-third of the board is elected by holders of the publicly traded Class A stock. In its last report to the SEC the hedge fund owned a bit over 12% of the Class A shares, so it would need support from several other major shareholders to elect any of its nominees to the board. The vote count on April 24th will be interesting.