On Monday, a pair of key shareholder advisory firms backed Allergan‘s (AGN) decision to allow Chief Executive Brent Saunders to also retain his chairman position.
Proxy advisory firms Institutional Shareholder Services and Glass Lewis recommended shareholders vote to against a proposal that would force Allergan to separate the two roles, Allergan said in a news release.
Activist investor Appaloosa Management is pushing for Allergan to find a “seasoned, independent chairman with extensive pharmaceutical experience.” It renewed that call in a letter to shareholders in February. Investors vote on the initiative May 1.
Will Brent Saunders Keep His Dual Roles?
Allergan plans to separate CEO and chairman roles in the future when Saunders steps down, ISS noted in its recommendation. The proxy advisory firm also applauded Allergan’s addition of an independent director role. Further, ISS noted Allergan has added six new directors since 2016.
“There are no significant concerns regarding the board’s current leadership structure sufficient to suggest that an immediate split of the CEO and chairman roles is warranted at this time rather than at the next CEO transition,” ISS wrote in its recommendation.
Glass Lewis, too, said the proposal from Appaloosa “is not necessary at this time.”
“We believe that the company’s phasing in of this policy upon the next CEO transition essentially implements the request of this proposal,” the firm said. “We do not believe that the adoption of this proposal would affect any meaningful change in the company’s leadership structure following the next CEO transition.”
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