Big institutional investors own shares in lots and lots of companies, so they often rely on advisory firms to help them decide how to vote in contested shareholder elections. The opinions of two such advisory firms have given the current board at Fisher Communications reason to celebrate.
Shareholders are due to vote next week – Wednesday, May 11th – on who will occupy four board seats at Fisher. With one dissident already on the board, a sweep by the slate offered by FrontFour Capital would swing the majority of the nine-person board to those pressing for a sale of the company, whether in whole or in pieces.
Fisher Communications announced, however, that two of the leading proxy advisory services – Institutional Shareholder Services (ISS) and Glass-Lewis & Co. – have recommended that the shareholders vote in favor of Fisher’s nominees for the board.
In making its recommendation, ISS concluded the following: “The company’s progress on its strategic plan—including not just strengthening broadcast competitiveness to give it additional pricing power, but expanding into adjacencies through its internet strategy, improving revenue mix, controlling cost and driving continual improvement in leading metrics — strongly suggests that the incumbent board, rather than the dissidents, has a better strategy for delivering shareholder value … Because the dissidents have not demonstrated a compelling case that change at the board level is needed, we recommend shareholders vote on the WHITE management card FOR the management nominees.”
In addition, Fisher noted, ISS called into question the trustworthiness of FrontFour’s arguments: “More disturbing, in the context of this proxy contest, is the Jesuitical equivocation from FrontFour that David Lorber — a FrontFour co-founder and current director of FSCI who also voted to reject declassification in the December board meeting — was somehow less culpable because he opted not to vote his conscience. FrontFour has asserted in letters to shareholders that Lorber ‘only reluctantly agreed to vote along with his fellow board members’ when it became clear they would not support declassification. This may be the world’s most tortured definition of ‘director independence’ — casting one’s vote in the way that will solidify one’s place in the pack, rather than in the way one has represented to other shareholders — particularly by sponsoring the proposal in the first place — one will act.”
Fisher supplied this quote from Glass-Lewis: “In full consideration of the presented arguments, we find little cause to support the Dissident’s solicitation. [FrontFour’s] financial arguments are largely absolute, failing to provide relative measures by which shareholders can fully and fairly assess Fisher’s purportedly lamentable performance. By contrast, our analyses of Fisher’s performance since the appointment of Ms. Brown suggest the Company has generally weathered a broader market downturn in more favorable condition than certain of its broadcasting peers.”
Glass-Lewis also said, “Perhaps more importantly, we do not find the concerns associated with the incumbent board so substantial as to warrant electing additional FrontFour representatives or their affiliates. To the contrary, we are concerned the election of the Dissident nominees, none of which has any relevant broadcasting experience, may, in fact, be counterproductive with respect to the Company’s long-term financial and operational health. We believe shareholders would be best served allowing the current board and management to continue implementing the existing strategic plan, including pursuing strategic alternatives with respect to the Company’s Fisher Plaza asset … Accordingly, we recommend shareholders FOR nominees Cassara, Hawley, Ogden and Wortsman on management’s WHITE proxy card.”
“We are pleased that these respected proxy advisors have recognized FrontFour’s failure to provide any meaningful plan to create value for Fisher shareholders, as well as its inconsistent positions. All Fisher shareholders should follow the advisors’ recommendations and vote the WHITE card, and only the WHITE card, to elect four highly qualified Board nominees who have the experience and background necessary to create and grow shareholder value,” said Paul Bible, Chair of the Nominating and Corporate Governance Committee of the Fisher Board of Directors.
RBR-TVBR observation: It is worth noting that Paul Bible, who is strongly opposed to the FrontFour slate, was elected with FrontFour’s David Lorber in 2009 as Mario Gabelli, whose funds are Fisher’s largest shareholder, demanded reform of the company’s board. Bible and Lorber are now at odds over the course the company should take. But Gabelli still holds the most votes.
RBR-TVBR does not have access to the full reports by ISS and Glass-Lewis, since institutional investors have to pay big bucks to subscribe to their services. It is significant, though, that both have come down on the side of the management slate.