Gildan Activewear just confirmed one of activist investor Browning West’s worst fears: moving up the start date of new CEO Vince Tyra by one month.
Gildan last month fired former CEO Glenn Chamandy and named Tyra as it new CEO with a start date of Feb. 12. That executive change kicked off what has become a mud-slinging brawl between the Gildan board and Browning West as the two engage in a power play as each side spins its own tale of woes.
Gildan said on Friday that Tyra will now start on Monday. “At the Board’s request, Mr. Tyra has made himself available to move the start date from Feb. 12 to respond to requests to engage early with key stakeholders and bring needed stability and leadership to the company as it embarks on its next chapter of success,” Gildan said.
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The activewear firm also restated the circumstances connected to its CEO search, and reiterated how qualified Tyra is for the position. Those qualifications include growing his own activewear business using Gildan as a supplier, and then joining Fruit of the Loom where as president he implemented a restructuring plan that led to a “sound financial footing ahead of its eventual sale to Berkshire Hathaway.” Gildan included comments from Bain Capital and others noting Tyra’s qualifications and leadership competence.
What Gildan hasn’t done yet is respond to Browning West’s demand that a special meeting of shareholders be held so a new board can be installed. A company spokeswoman on Tuesday said: “Gildan Activewear Inc. acknowledges receipt of Browning West’s Requisition of a Special Meeting of Shareholders and will respond once it has been reviewed.”
The firing of Chamandy and the hiring to Tyra caught the ire of Browning and other institutional investors who took Chamandy’s side and are now insisting that he be reinstalled as CEO.
The mudslinging in the battle between some investors and Gildan’s board has included board chair Donald C. Berg accusing Chamandy of failing to live up to his part of the agreement for a succession timeline, as well as charges that he presented a “high-risk” proposal that would entrench himself as CEO.
The board on Monday charged that Chamandy is wielding a “false narrative” to get Browning West to lobby for his reinstatement. Other disclosures include allegations that Chamandy gradually disengaged as CEO, growing more focused on other “outside personal pursuits” and that he was convening fewer senior leadership meetings.
“We would have preferred to keep many of these details private, but the public misinformation tactics by Mr. Chamandy and Browning West demand a public response,” the letter reads, outlining previously undisclosed details of the high-profile power play underway.
Browning West on Tuesday responded with its demand for the special meeting where it wants to install eight hand-picked executives—up from the initial five—that would further its plan to reinstall Chamandy to the CEO role. Browning said it had no choice but to pick additional nominees, charging that new developments suggest that Gildan’s current board “is far more entrenched than we had previously imagined.” It made this accusation based on recent interactions with board as well as the board’s public statements.
Browning West cofounders Usman S. Nabi and Peter M. Lee expressed concern that the Gildan board would delay its annual shareholders meeting and any special meetings to as late as Fall 2024, and “deploy baseless litigation tactics against its own shareholders.” The activist investor is worried that the Gildan board might try to push up the date when Tyra is scheduled to start.
Browning West and other independent shareholders control 35 percent of Gildan’s outstanding shares. These shareholders include Turtle Creek Asset Management Inc., Anson Funds Management LP, Oakcliff Capital, Jarislowsky Fraser Ltd, Cooke & Bieler LP, Pzena Investment Management Inc. and Janus Henderson.
“It is clear to us—and presumably our fellow shareholders—that Gildan’s board is trying to use Vince Tyra’s accelerated start date to defy shareholders who have clearly rejected Mr. Tyra and to shift attention away from our requestioned Special Meeting. However, the board cannot run from the fact that holders of 35% of the company’s outstanding shares publicly support meaningful boardroom change and the reinstatement of Glenn Chamandy,” a Browning West spokesman said. “We intend to keep the focus on the board, which bears responsibility for the disruptions, reputational harm and value destruction that has ensued following its irresponsible termination of Mr. Chamandy.”
