Browning West, who holds 5.0% of Gildan Activewear’s outstanding shares, intends to requisition a special meeting to empower shareholders to reconstitute Gildan’s board of directors by replacing five incumbent directors with a slate of "highly qualified" candidates.
The move follows concerns raised over the board's recent "destructive actions", particularly the abrupt termination of Gildan’s long-time CEO and co-founder, Glenn Chamandy, without cause, despite his "significant track record of value creation" over 25 years.
Browning West says the decision and the subsequent appointment of Vincent Tyra as CEO has seen the company's stock underperform the relevant index by 19%, translating to over $1bn in value destruction.
The appointment of Tyra "characterised by a lack of best-in-class experience and a history of value destruction," further added to shareholder concerns.
Browning West also highlighted the board's disregard for the feedback of nine shareholders representing over 35% of outstanding shares who opposed the CEO succession decisions.
The proposed slate of directors includes the current chair of United Rentals, Michael Kneeland, Chamandy, co-founder and partner of Browning West, Peter Lee, former senior VP at Walmart, Karen Stuckey, and J.P. Towner, ex-chief financial officer of Dollarama.
Browning West believes that these individuals bring strong track records of value creation, expertise in successful succession planning, and relevant industry experience.
The investor says the introduction of these candidates aims to remedy the Board’s "mishandled CEO succession and establish the highest quality governance in the company's history.”
In a letter addressed to fellow shareholders, Browning West emphasised the need for change in the boardroom, citing the incumbent directors' unwillingness to act in the company's and its shareholders' best interest.
The special meeting, if successful, will provide the newly reconstituted board with a mandate to reassess committee composition, reassign committee chair roles, and take immediate actions, including appointing Kneeland as independent, non-executive chair, terminating Tyra’s employment, and re-appointing Chamandy as CEO.
The requisition for a special meeting is viewed by Browning West as a referendum on the board's actions, aiming to prevent further damage to Gildan’s business and stakeholders.
Browning West urges Gildan’s Board to refrain from actions that could entrench itself or delay the special meeting.
Gildan did not return request for comment at time of press.
