Grubb & Ellis, the real estate investment operation based in Santa Ana, California, now says that its stockholders voted (Dec. 3) to re-elect the three nominees on the incumbent board: Harold H. Greene, Devin I. Murphy and D. Fleet Wallace.
Accordingly, they rejected Tony Thompson and the other two members of his slate -- Harold Ellis Jr. and Stuart Tanz.
Wait, I just noticed something. Sometimes I'm slow. But, one of the members of the defeated dissenting slate has a family name that looks a lot like the name of the company.
Harold ELLIS Jr., versus the incumbents of Grubb & ELLIS.
Ah, yes, there's more than one foiled comeback saga here. I understood that Thompson, the leader of the dissident slate, was a former chairman of the company, trying to return to it after a (brief) period at Elba. But what I didn't realize until just now was that the Ellis on his slate is also the Ellis on the company door. He founded the company half a century ago.
Ah, corporate history. Ah, humanity.
Showing posts with label Tony Thompson. Show all posts
Showing posts with label Tony Thompson. Show all posts
Sunday, December 14, 2008
Wednesday, December 3, 2008
Conflict of Interest
So what's the most dramatic piece of this puzzle in which I've been trying to interest you this week?
Why should we pay attention especially to the proxy fight over Grubb & Ellis at today's shareholders meeting?
It features a dandy conflict-of-interest charge.
The playbook sometimes calls for the incumbent management to say, "shareholders, please don't vote for the challengers. They, or some of them, or the leader of the gang, owns interests in other companies which have interests that compete with yours and our. If they take over this company, they'll end up running it for the benefit of those competing interests, at your expense."
The charge in this case, as made by the incumbents, is that "Anthony Thompson is attempting to take control of Grubb & Ellis and install Stuart Tanz as CEO with the intention to cause Grubb & Ellis to buy or absorb Thompson's newly formed company, Thompson National Properties, a direct competitor."
Thompson's answer is that the two companies aren't direct competitors. They're both real-estate related but that phrase covers a wide range of actual operations.
As Thompson describes TNP, it is more a customer of G&E than a competitor, having purchased 3 buildings from them in 2008.
What about the claim that Thompson wants G&E to purchase TNP?
Thompson and his slate scoff at this, too. Even if they win the election today, they'll have at most three seats out of the eight, so they couldn't push through such a decision by themselves.
Also, Thompson owns a 14% stake in G&E. So, he asks, why would he press actions that would undermine the value of that stake?
One could speculate about responses to such points. After all:
(1) customers are sometimes also the competitors of their suppliers.
(2) even a consistent customer-supplier relationship could generate conflicts of interest. Conceivably, TNP could want to buy G&E to so arrange things that it could thereafter pay lower commissions when it buys buildings [just a hypothetical off the top of my head folks -- in other words, I just made it up!] but
(3) Thompson could for all I know be angling to have G&E buy TNP at an inflated price regardless of what their relationship to each other has lately been -- and could reckon that his gain on one side of that deal would exceed his loss at the other, and
(4) A three vote block on an eight member board is a formidable one, especially if the other five aren't a cohesive block themselves.
And so forth. Round and round the mulberry bush we could go.
Let's wait and see who wins this one.
Why should we pay attention especially to the proxy fight over Grubb & Ellis at today's shareholders meeting?
It features a dandy conflict-of-interest charge.
The playbook sometimes calls for the incumbent management to say, "shareholders, please don't vote for the challengers. They, or some of them, or the leader of the gang, owns interests in other companies which have interests that compete with yours and our. If they take over this company, they'll end up running it for the benefit of those competing interests, at your expense."
The charge in this case, as made by the incumbents, is that "Anthony Thompson is attempting to take control of Grubb & Ellis and install Stuart Tanz as CEO with the intention to cause Grubb & Ellis to buy or absorb Thompson's newly formed company, Thompson National Properties, a direct competitor."
Thompson's answer is that the two companies aren't direct competitors. They're both real-estate related but that phrase covers a wide range of actual operations.
As Thompson describes TNP, it is more a customer of G&E than a competitor, having purchased 3 buildings from them in 2008.
What about the claim that Thompson wants G&E to purchase TNP?
Thompson and his slate scoff at this, too. Even if they win the election today, they'll have at most three seats out of the eight, so they couldn't push through such a decision by themselves.
Also, Thompson owns a 14% stake in G&E. So, he asks, why would he press actions that would undermine the value of that stake?
One could speculate about responses to such points. After all:
(1) customers are sometimes also the competitors of their suppliers.
(2) even a consistent customer-supplier relationship could generate conflicts of interest. Conceivably, TNP could want to buy G&E to so arrange things that it could thereafter pay lower commissions when it buys buildings [just a hypothetical off the top of my head folks -- in other words, I just made it up!] but
(3) Thompson could for all I know be angling to have G&E buy TNP at an inflated price regardless of what their relationship to each other has lately been -- and could reckon that his gain on one side of that deal would exceed his loss at the other, and
(4) A three vote block on an eight member board is a formidable one, especially if the other five aren't a cohesive block themselves.
And so forth. Round and round the mulberry bush we could go.
Let's wait and see who wins this one.
Tuesday, December 2, 2008
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.
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.
Monday, December 1, 2008
Grubb & Ellis
The shareholders of Grubb & Ellis, a major real-estate services company, meet Wednesday.
Elections to the board are staggered, so only three of the eight seats are in play this year.
Tony Thompson, the former company chairman, was ousted earlier inthe year but he remains the company's second largest shareholder (with 14%) and he wants back on the board.
The largest stake belongs to one of the directors who is not up for re-election this year, C. Michael Kojaian, who was 23%.
The largest institutional stake is in the hands of Wellington Management Co., Boston (7.5%),
The two other members of Mr. Thompson's challenge slate are Stuart Tanz and Harold Ellis. The three incumbents they're seeking to replace are: Harold H. Greene, Devin I. Murphy, and D. Fleet Wallace.
That's the score card. More about the state of play tomorrow.
Elections to the board are staggered, so only three of the eight seats are in play this year.
Tony Thompson, the former company chairman, was ousted earlier inthe year but he remains the company's second largest shareholder (with 14%) and he wants back on the board.
The largest stake belongs to one of the directors who is not up for re-election this year, C. Michael Kojaian, who was 23%.
The largest institutional stake is in the hands of Wellington Management Co., Boston (7.5%),
The two other members of Mr. Thompson's challenge slate are Stuart Tanz and Harold Ellis. The three incumbents they're seeking to replace are: Harold H. Greene, Devin I. Murphy, and D. Fleet Wallace.
That's the score card. More about the state of play tomorrow.
Subscribe to:
Posts (Atom)
