Sixty-five million down the drain.
That’s how much Gildan Activewear’s reinstated CEO Glenn Chamandy estimated the former firm’s board spent in its proxy fight with activist Browning West for control. The battle was launched in December after Gildan dumped company cofounder and former CEO Chamandy. The underwear and T-shirt manufacturer went on to hire Vince Tyra as his replacement.
The activist called the Gildan battle the “most expensive proxy fight in Canadian history,” totaling $17.1 million from the end of the fourth quarter through March 31. Those costs include legal fees for lawsuits and claims filed by Gildan against the investment firm, which were later dismissed, as well as costs connected to Gildan putting itself up for sale.
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Gildan in April refreshed its board, all of whom resigned last Thursday following the lack of confidence from proxy advisory firms ISS, Glass Lewis and Egan Jones, after all three issued reports telling shareholders to vote in favor of Browning West’s slate of board nominees. Tyra also stepped down as president and CEO.
The company held its annual shareholders’ meeting on Tuesday, where Chamandy and the Browning West nominees were elected to the Gildan board. The voting results still need to be certified, which should be available on Wednesday.
According to sources familiar with Gildan’s Annual Meeting results, Browning West’s entire slate of directors received support from over 85 percent of votes cast at the meeting. Referring to that level of support as “extremely rare,” they noted that the legacy board’s candidates received between 13 percent and 20 percent of the votes cast at the meeting. In addition, votes for both former CEO Vince Tyra and former chair Tim Hodgson came in at the “bottom of that range,” these sources noted.
Chamandy met with reporters after the meeting and said the board battle cost the company about $65 million, although the total expense is still being tabulated, according to a Canadian Press story.
He told reporters that the $65 million includes severance to outgoing board members and two executives, in addition to legal costs for the board battle and the company sale process, which has since been abandoned. Chamandy also said that figure doesn’t include his severance, which he said he never received.
Chamandy on Friday was named president and CEO, with Michael Kneeland appointed board chair.
“I’m extremely excited to return as Gildan’s CEO and am gratified for the incredible support I have received from both shareholders and employees over the past six months,” Chamandy said Friday in a statement. “The resilience of the team and the high quality of our newly seated Board give me great confidence that Gildan’s best days are yet to come.”
“As independent directors, we will help usher in accountability and alignment at Gildan. The interests of the Company and its stakeholders will remain relentlessly in focus under the new Board,” Kneeland said.
