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ISS recommends Aerojet investors back CEO in bitter proxy contest
Published Jun 17, 2022 08:14PM ET
Updated Jun 17, 2022 08:50PM ET
© Reuters.
By Svea Herbst-Bayliss
BOSTON (Reuters) -Prominent proxy advisory firm Institutional Shareholder Services (ISS) on Friday backed Aerojet Rocketdyne Holdings (NYSE:AJRD) Inc CEO's eight-person board of directors slate, dealing a blow to the U.S. rocket maker's executive chairman, who also wants control of the board.
Chief Executive Eileen Drake and Warren Lichtenstein, the executive chairman, each proposed eight director candidates to sit on the board.
Investors will vote on director candidates on June 30.
"While a board free from the direct influence of Lichtenstein is preferable, either slate would be better than the status quo," ISS wrote.
But ISS feels Lichtenstein should lose his seat. "There may be a role for (him) at AJRD – that role is just not as a board member at this point in time."
The standoff between Drake and Lichtenstein, whose Steel Partners and affiliates own more than 5% of the company, escalated since the collapse of a planned sale of Aerojet to Lockheed Martin Corp (NYSE:LMT), the company's biggest customer.
The ISS report came a day after a Delaware Chancery Court judge ruled that Drake violated a court order by using company resources to back her slate of candidates.
A spokesman for Lichtenstein on Friday repeated his Thursday statement questioning how shareholders can trust Drake after the judge rule she "misused corporate resources in pursuit of board control."
A representative for Drake did not immediately respond to a request for comment.
Drake offered to settle and resign in return for a $48 million package, nearly double the $25 million she would currently receive if there was a change of control.
Lichtenstein argued that operational improvements and changes to capital allocation are needed to help push up the share price and attract new buyers. He wants to bring back Mark Tucker, a former Aerojet chief operating officer, as CEO. ISS wrote, "There is still insufficient evidence to conclude that Drake necessarily must be replaced."
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