Proxy firms offer opposing advice on Magna's Stronach
TORONTO (Reuters) - Two prominent proxy advisory firms have opposing advice for Magna International Inc MG.TO shareholders who will decide whether to re-elect Magna's controversial founder Frank Stronach as director at the auto-parts maker's annual meeting on May 10.
Glass Lewis & Co is recommending shareholders withhold their vote for Stronach, citing 2011 real estate deals in which Magna sold properties at a loss to companies affiliated with Stronach and former Magna Co-Chief Executive Siegfried Wolf.
Glass Lewis also pointed out that Stronach failed to attend 75 percent of board meetings, "a fundamental failure to fulfill his role as director".
In contrast, ISS Proxy Advisory Services recommends that shareholders vote for Stronach, whom it says had valid reasons for being absent from the meetings. The ISS report does not refer to the real estate deals.
Magna, long criticized for its corporate governance, paid Stronach nearly $900 million in 2010 to cede control of the company he started.
The buyout bid, which became a lightning rod for shareholder anger, was approved by an independent committee that examined the deal, but there was no independent evaluation to determine if the deal was fair to minority shareholders.
Company Chairman Mike Harris, who also headed the independent committee, is stepping down from Magna along with the two committee members, Donald Resnick and Louis Lataif.
An Ontario Superior Court judge ruled that Stronach's buyout deal was fair and balanced even though Canada's two biggest pension funds argued it was unfair and overly rich.
Magna declined to comment on the Glass Lewis report, saying that the company's disclosure is complete in its proxy circular and first-quarter interim financial filing. Continued...