After Gildan announced the dismissal of CEO and company director Glenn J. Chamandy, several of the company’s shareholders begun demanding his reinstatement, arguing that the responsibility to remove leadership should belong to shareholders.
Now, Gildan’s board of directors reportedly agreed to a special meeting to potentially reinstate Chamandy.
Since the time of Chamandy’s dismissal in December, the board has justified their actions by saying Chamandy “was distracted by non-Gilda pursuits, like a Barbados golf course, and that he threatened to quit unless directors backed an acquisition-focused growth strategy,” per CNBC.
Chamandy denied this, and said that the board’s actions are “value-destructive.”
Investment firm Browning West, which at the time of Chamandy’s firing had 3.9% of Gildan stock, which has now risen to 5%, has gained enough support among other shareholders to coerce the board into this special meeting, which is scheduled for May.
In a statement, though, Browning West makes the whole thing sound a little more confusing, saying that Gildan’s board has called “a so-called annual and special meeting of shareholders (the “Meeting”) to be held on May 28, 2024, while also seeking to cancel the special meeting of shareholders (the “Special Meeting”).
““Through its actions, including refusing to set a timely date for the Meeting, the Board is once again demonstrating a complete disregard for sound corporate governance and a total lack of respect for the will of shareholders,” Usman S. Nabi and Peter M. Lee said in the statement. “It appears the board has learned nothing from its recent string of ill-conceived decisions and publicity stunts, which seem to have only succeeded in alienating shareholders.”
Nabi and Lee also criticized the appointment of new CEO Vince Tyra, who previously worked for Fruit of the Loom and Border Brothers.
“It is clear to us – and presumably to all other Gildan shareholders – that setting a Meeting date nearly five months after receiving a valid requisition for a Special Meeting is a transparent attempt to buy time for a seemingly unqualified Chief Executive Officer with a record of value destruction and an entrenched Board,” the statement says.
According to CNBC, Browning West is currently looking to replace Donald Berg, former CFO of Brown-Forman, as Gildan’s board chair, as well as seven other director positions, with their own candidates, including Lee.
Gildan responded with a statement of its own, calling the whole situation an “unnecessary proxy contest,” and said that it “remains ready and willing to engage with Browning West; those who share some but not all of their views; and the majority of shareholders who are not aligned, to identify a responsible solution that benefits all shareholders, not just some.”
Also in its statement, Gildan said that part of the reason for the May meeting was to provide shareholders a chance to engage with Tyra and gauge his capability so that they can “make the most informed decision about whom they assess is the best executive to lead Gildan.”
