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On the heels of a suggested board refresh and corresponding proxy fight, it’s recently been announced that former Gildan CEO Glenn Chamandy is rebuffing a probe into his conduct, claiming a severance payment worth $38 million after being dismissed by the clothing manufacturer. The Globe and Mail reports that Gildan is claiming Chamandy refuses to co-operate and provide information to an external investigator looking into his actions around the time he was let go December 2023.
This latest news was reported on shortly after the company announced it will replace five members of its board of directors ahead of its annual meeting set for May 28. Gildan has also filed its management proxy circular with the Canadian securities regulatory authorities on SEDAR+. The company encouraged shareholders to vote on the blue proxy card “FOR” all of Gildan’s director nominees, as reported by multiple news outlets, including the elections of Karen Stuckey and J.P. Towner, who have been nominated by Browning West. In addition, the company announced the launch of its 2024 Annual Meeting website: www.futureofgildan.com.
But Browning West remains resistant and continues to push for Chamandy’s return as CEO. In an article shared by Yahoo! Finance, Gildan said the five-month process to reconstitute the board included 87 meetings with shareholders, including various Browning West supporters. Gildan reported that those meetings gave the company a clear direction on the type of board that shareholders wanted to see moving forward. However, the company claims that Browning West has still been resistant, leading to the proxy fight.
Chamandy Seeks Payout
Now, in this latest move, Gildan says that Chamandy is seeking a $38-million payout and is not cooperating with an internal probe, claiming he was terminated without cause. The Globe and Mail report shares that due to complications caused by this recent move along with attempts by certain shareholders to seek his reinstatement, directors have decided not to make a decision on any payments to the former CEO until after the May 28th meeting. The previous year’s information circular stated he was entitled to $20 million under his employment contract.
Gildan hired law firm Dentons to look into Chamandy’s conduct in the months before and after he was let go, according to The Globe and Mail. One specific area being probed is the former CEO’s relationship with Browning West.
“We are now at a pivotal moment in the trajectory of Gildan,” the clothing manufacturer says in the proxy filing. Shareholders have a choice between reverting to a past “devoid of a credible growth path” or embracing a bright future with an inspired CEO and a newly refreshed board committed to collaboration and value creation, the company went on to say.
Chamandy has not responded with additional comments at the time of writing.
