GenCorp settlement

Defense contractor GenCorp now appears to be headed to an uneventful annual meeting this week (Wednesday) after reaching an agreement with Steel Partners, the hedge fund that controls 14% of its equity.

As part of the settlement, GenCorp's president and chief executive, Terry Hall, has stepped down. The interim CEO is J. Scott Neish, and efforts to recruit a permanent replacement for Hall are underway.

Also, three new directors recommended by Steel Partners will take seats on the 8-member board of directors.

The parties apparently reached this agreement on March 5, but didn't announce it until the 17th. In the first two trading days after the announcement, GenCorp's stock price rose markedly. But in the following two days the price slide back to the pre-announcement level. The lesson, I suppose, is that although investors were happy with the resolution, broader market turmoil overwhelmed that narrow-gauge sort of happiness.

GenCorp meeting date set

GenCorp's shareholder's meeting is now set for March 26 at the Ritz-Carlton in Washington, DC. The record date is February 1.

To their credit (in my humble opinion) the board of GenCorp has made some moves over the last couple of years to modernize their system of governance. It has separated the role of chairman from that of chief executive; it has allowed the expiration of an old "poison pill" provision; and it has declassified its board.

Of course, it has done these things under pressure. Still, it has done them.

Also, over the same two year period the price of a share of GenCorp (NYSE: GY) has been in decline. It was worth about $19 two years ago, and is worth somewhat less than $11 today.

The dissident slate available to voters at this month's meeting is backed by hedge fund Steel Partners.