The upheaval surrounding the annual general meeting at Stobart Group (STOB) has come to a conclusion – at least for now. Iain Ferguson has been re-elected as chairman with 51.2 per cent of shareholder votes. Former chief executive and founder of Stobart, Andrew Tinkler, has spent recent months encouraging shareholders to vote against Mr Ferguson, and instead to replace him with retail entrepreneur Philip Day. Mr Day has failed to confirm his willingness to be elected within the required period.
Following the shareholder vote, it has been announced that Mr Ferguson will stand down after next year’s AGM. A spokesperson for the company said the decision was not related to the AGM, but instead was a natural progression since the chairman would have been in the role for six years by the time he leaves. In the nearer term, Stobart is on the hunt for a new chief financial officer after Richard Laycock stepped down from his role ahead of the meeting for personal reasons.
Mr Tinkler was most recently a director at the company, but was fired by the board last month for breach of fiduciary duty and contract, and legal proceedings have been initiated against him. In turn, Mr Tinkler is suing the board for defamation. His termination meant that the AGM resolution to re-elect Mr Tinkler was made ineffective ahead of the AGM, but was later proposed on the floor at the event. The proposal won 51.4 per cent of shareholder votes, but was struck down by the board. Mr Tinkler has since tweeted that he will be investigating the outcome of the shareholder vote, calling his second removal by the board “corporate governance at its worst”.
The close results mean that the issues between the board and Mr Tinkler are unlikely to be finished. Mr Tinkler still holds 7.8 per cent of the shares and has the support of fund manager Neil Woodford through Woodford Investment Management, which holds 20 per cent. Former Stobart director Allan Jenkinson, with a 5.6 per cent stake, also backed Mr Tinkler. On the other hand, Stobart’s largest shareholder, Invesco, holds 25 per cent of the shares and backs Mr Ferguson, as does Royal London with 2.6 per cent. Last week two proxy advisers, Institutional Shareholder Services and Glass Lewis, recommended shareholders to re-elect Mr Ferguson as chairman.
The clash between Mr Tinkler and the board has been ongoing since last year. A spokesperson for Mr Tinkler suggested it stemmed from Stobart’s discussions with Flybe (FLYB) over a possible takeover. In February, Stobart had stated that it had vehicles in place to fund the potential deal, but Mr Tinkler was not comfortable with such funding. On the other hand, current chief executive Warwick Brady had previously said that Mr Tinkler was good at deal-making but not at generating operating cash.
Mr Tinkler has also claimed that the result was “gerrymandered” after Stobart moved around 7m shares, or 2 per cent of the company’s voting rights, from a corporate treasury to an employee benefit trust. This transaction meant that the shares could be used in voting.