Charge and Reply

In the proxy dispute over Grubb & Ellis that I described in yesterday's entry, the dissident slate's filings make the following points:

1. Financial Performance has deteriorated over the last year. In the first three quarters of 2008, the company lost $55 million. In the same three quarters of 2007, it made a profit of 14.4 million.

2. Stock price has suffered. Mr. Thompson, leader of the dissidents, left the board in February 2008. Since then the stock has lost 82% of its value. Of course, all stocks have been down in that period, althoughthe dissidents contend Grubb & Ellis has underperformned its peers,

3. There's nobody at the helm. The CEO, Scott Peters, resigned four months ago. The board hasn't named any permanent replacement. The dissidents say, "In our view, Rome is burning and this is hardly the time for the Board to fiddle."

4. An alarming amount of turnover lately, both in management positions and in the company's brokerage division.


To such charges the company responds that althouygh times are turbulent, its results ARE in line with industry peers. It has eliminated more than 10% of its brokerage professional because they weren't meeting expetations, and it has attracted new blood to key managerial roles -- these facts are, in the incumbents' view, signs of strength not of weakness.

As to the CEO post, they say they're working on it. Or, in the relevant lingo: "The Board of Directors is undertaking a comprehensive search for a permanent CEO to lead the Company forward and to continue to execute on our strategic initiatives to the benefit of all stockholders." Don't taz me, bro.

There are more dramatic charges flying around, involving conflicts of interest. But I'll save them until tmorrow, which happens to be the day of the showdown, errr, meeting.