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Say no to Harris: Firm

Magna International shareholders should vote against the re-election of lead director Mike Harris and two other board members for failing to meet their responsibilities in the controversial deal to eliminate the company’s dual stock structure, a top international proxy firm says.

Magna International shareholders should vote against the re-election of lead director Mike Harris and two other board members for failing to meet their responsibilities in the controversial deal to eliminate the company’s dual stock structure, a top international proxy firm says.

ISS Proxy Advisory Services, which offers voting recommendations to institutional investors around the world, criticized the three directors who sat on a special committee for not advising shareholders properly on the deal’s fairness last year that resulted in a huge payout to founder Frank Stronach.

Harris, a former Ontario premier, led the special independent committee of directors and negotiations with Stronach and his daughter Belinda, in efforts to negotiate a better deal for shareholders.

However, Harris told an Ontario Securities Commission hearing looking into the deal that Frank Stronach, Magna’s chairman, remained firm on the terms. Stronach indicated that if Magna’s board did not agree to the price, corporate control would remain in his family’s hands despite the trust holding just a tiny fraction of the company’s equity, Harris said.

The commission intervened in the proposed deal by forcing Magna to produce more information for shareholders before a vote.

The recommendation by ISS comes in advance of Magna’s annual shareholders meeting next month where Stronach, 78, has indicated he will step down as chairman but remain honorary chairman.

The Stronach family trust still remains one of the company’s biggest A shareholders.

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