Paul Desmarais Jr. and André Desmarais faced fierce opposition from Power Corporation shareholders over their re-election to the board of directors of the Montreal conglomerate.
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Excluding the Desmarais family control bloc, nearly 45% of the votes cast at Tuesday’s gathering were against the re-election of Paul Desmarais Jr. Opposition reached nearly 33% for André Swamps.
It is not yet clear how the Caisse de Depot voted, but CPP Investments and the Ontario Teachers’ Pension Plan both voted to re-elect the two brothers. However, a Desjardins fund refused.
Last year, still excluding Desmarais involvement, almost 45% of the votes cast were against the re-election of André Desmarais and almost 36% against that of Paul Desmarais Jr. National Bank Funds, RBC and Vanguard had voted against the re-election of one or both at the time Brothers.
recommendations
The wind of protest follows recommendations from voting rights advisory firms Institutional Shareholder Services (ISS) and Glass Lewis.
ISS and Glass Lewis have recommended that shareholders vote against the re-election of Paul Desmarais Jr. as he chairs Power’s board of directors and nominating committee.
“The Board has failed to demonstrate an appropriate level of commitment to improving gender diversity by having fewer than 30% women in directorships,” the ISS report on Power Corporation said.
About 29% of power directors are currently women, up from 21% two years ago. However, there are no women in the top management of the group.
“We believe the board should take note of the significant level of disapproval” from shareholders regarding the re-election of the Desmarais brothers, Glass Lewis wrote, citing last year’s voting results.
The two specialized companies also regret maintaining multi-voting interests, allowing the Desmarais family to control 51.3% of the voting rights of Power Corporation while holding only 15.5% of the company’s shares.
Thanks to the 10 votes each of their actions receives, the Desmarais were able to ensure that Paul Jr. and André were re-elected with more than 82% of the overall support.
“Power Corporation is proud to be able to count on the expertise of a recognized, solid and experienced Board of Directors,” commented a spokesman for the conglomerate, Stéphane Lemay.
Glass Lewis also recommended that shareholders reject Power’s executive compensation policy, which it believes is overly generous in relation to the group’s financial results. Holders of almost 11% of the company’s shares voted against the directive (with the exception of the Desmarais family).
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