Gavin Darby, the CEO of the UK’s Premier Foods, has survived an attempt to unseat him by activist investors.
He received the support of 59.01% of shareholder votes with 40.99% of shareholders voting against his continuing in the role.
Hong Kong-based Oasis Management, the activist investor which campaigned against Darby’s re-election, has accepted it has been unsuccessful.
It said in a statement: “A majority of Premier Foods’ top independent public equity shareholders have voted against the re-election of Gavin Darby. He has been saved by what we consider to be his cosy relationship with conflicted shareholder Nissin Foods, reminiscent of what happened in 2016 with the McCormick takeover approach.”
Two years ago, US spices and seasonings group McCormick & Co. withdrew its interest in buying Premier after the UK firm rebuffed its advances.
Oasis had called on Nissin Foods Holdings, Premier’s largest shareholder with a stake of just less than 20% in the Mr Kipling cakes and Loyd Grossman sauces maker, to abstain in the vote, claiming it had a conflict of interest.
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During a stormy AGM in London this morning, Darby received support from some shareholders and from a former Premier chairman but at least one independent shareholder told him it was time for him to step down.
And according to The Guardian newspaper, which had a reporter at the meeting who was tweeting throughout, a former Premier non-executive director, Charles Miller Smith, told the meeting he had helped to appoint Darby but thought it was time for him to go as he “lacks leadership skills”.
The newspaper further reported that, when an Oasis representative asked Darby directly if he would resign, he told the meeting he has “had huge support from people who, unlike Oasis, understand the food industry”.
After the meeting Premier chairman Keith Hamill said: “A majority of shareholders who voted followed the board’s advice in supporting the re-election of Gavin Darby, CEO, to the board of the company, and the board appreciates their support.”
“Over recent weeks we have had discussions with a substantial proportion of the major shareholders, which has included listening to the concerns expressed by those whose support we have still to earn. The board will give careful consideration to all shareholders’ views. Discussions with shareholders will continue, including matters arising from voting at the AGM.”
“The board is committed to continuing its strategy of improving performance and reducing net debt, while working in parallel to identify other strategic opportunities to accelerate the company’s turnaround to create value for shareholders.”
The Oasis statement, released at lunchtime today, went on to say: “The message from today’s huge negative vote could not be clearer – Gavin Darby has no credibility and he should step down immediately. If he is unwilling to resign, we urge the other directors to discharge their duties and act in the best interests of the shareholders as a whole to remove him.”
Oasis said it is carefully considering its next steps.
It had called on Darby to be removed from his position, claiming his five year period in charge has seen Premier drift into a “zombie-like state” burdened by heavy debt and low growth.
Oasis has also suggested the company should sell its Batchelors brand. Ahead of the AGM today Premier Foods suggested it is open to selling assets.