Argo Group International Holdings ended up having a fairly routine annual meeting on May 24, after spending months fending off accusations of excessive spending and other abuses from an activist shareholder. One exception: A tight vote on executive compensation.
The Bermuda-based specialty insurer and reinsurer said that shareholders voted to elect all five of its Class III directors to the Argo board, based on a preliminary count provided by its proxy solicitor.
Voce Capital Management had accused the insurer of spending extravagantly on things including a corporate art collection and luxury home/corporate jet travel for Argo Group CEO Mark Watson in allegations going back to February. Argo has consistently denied any wrongdoing. In its campaign against Argo ,Voce nominated five independent director candidates, but it withdrew the nominations on May 21, alleging Argo had poisoned shareholder votes by using “underhanded tactics and manipulating its complex corporate machinery for the benefit of the board and management at the expense of shareholders.”
Argo insisted that it has played fair, and in its May 24 announcement, said that Vocce’s nominations and proposals wouldn’t have gained much traction anyway if left to vote for the annual meeting.
“Prior to Voce’s announced withdrawal days before [Argo’s Annual General Meeting,] Voce’s nominees and proposals had received limited shareholder support,” Argo said.
Argo added that as of May 20, Sedgwick Browne, Argo’s Class III Director targeted for removal by Voce, received shareholder support from more than 80 percent of the submitted proxies. As well, nearly 80 percent of the submitted proxies had voted against the removal of Argo’s Chairman, Gary Woods and more than 80 percent of the submitted proxies had voted against the removal of the other directors targeted by Voce, Argo noted.
The vote on executive compensation was quite close, however. Argo said that preliminary voting on a non-binding advisory resolution on executive compensation earned just over 50 percent of votes in favor, with nearly 49.5 against.
Woods said that the company would work with shareholders to better understand their concerns about compensation.
“Our board will carefully consider these results, as well as future shareholder input, in determining executive compensation going forward,” Woods said.
He added, in prepared remarks, that conversations in recent months about the company’s strategy and plans to create shareholder value have been productive.
“We deeply value their perspectives, and we plan to maintain an active and productive dialogue with our shareholders as we continue to integrate their feedback and executive on our strategy,” Woods said.
Source: Argo Group
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