FIRSTGROUP has seen off an attempted boardroom coup by a US activist investor after shareholders voted against proposals to oust the bulk of its board, including boss Matthew Gregory.
But its victory was far from unanimous, with chairman Wolfhart Hauser later announcing his decision to step down. That came after Coast Capital secured significant support for its resolutions calling for the removal of Mr Hauser and Mr Gregory, as well as for board positions for its own nominees, at a general meeting in London.
Coast, the biggest shareholder in FirstGroup with a 10 per cent stake, said it viewed Mr Hauser’s resignation “as a constructive first step in the direction of finally achieving full value for shareholders.” It added: “Coast believes that FirstGroup needs and deserves a board which is populated with directors who have the relevant experience and who act to the benefit of all shareholders. We will continue to pursue this goal vigorously.”
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FirstGroup said Mr Hauser’s resignation was not linked to the result of a resolution calling for his immediate removal, which was backed by nearly 30% of the voted shares.
Mr Hauser, who briefly served as executive chairman at FirstGroup after former boss Tom O’Toole stepped down in May last year, said: “Having renewed the board through the appointment of independent directors with a diverse range of skills and expertise focused on the future of mobility services and overseen the appointment of Matthew Gregory as chief executive and Ryan Mangold as chief financial officer to drive delivery of the strategy, it is now time for me to move on.”
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FirstGroup has been embroiled in an increasingly tempestuous war of words with Coast in recent weeks, which kicked off last month when the New York-based activist launched a campaign for boardroom change at the company. The investor accused the board of presiding over a “track record of value destruction and under-performance”, and raised the prospect of selling off parts of the group in order to “create value” for shareholders, employees and pensioners. It argued that the current board did not have the necessary transport sector and turnaround expertise to revive the fortunes of the company, claiming its performance lagged it rivals.
FirstGroup launched a new strategy of its own on May 30, under which it proposed to exit its bus operation and pull back from bidding for further rail franchises in the UK. It revealed that it had begun the process of finding a buyer for its Greyhound inter-city coach business in the US, declaring that the future of the company would be based around its First Transit and First Student operations across the Atlantic.
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At yesterday’s meeting, shareholders were asked to vote on a series of resolutions tabled by Coast, calling for the removal of six board members and their replacement with seven of its nominees.
Coast saw all of its resolutions defeated. However, the results revealed a a significant degree of support for its proposals, with 25% of the voted shares supporting a resolution to remove Mr Gregory.
Coast meanwhile saw more than 36% of the voted shares support its resolution to install Steve Norris, a former UK transport minister, as a director. A resolution calling for David Martin, the former boss of bus giant Arriva, was not put to the meeting, as the company did not receive confirmation of his willingness to be appointed a director.
FirstGroup noted that “more than 20% of shareholders voted in favour of several resolutions against the board’s recommendation.”
It added: “The board takes seriously its responsibility to understand shareholders’ opinions and will continue to engage with our investors over the coming weeks to discuss any views they may have, as reflected in the votes on those resolutions, as part of its ongoing programme of engagement.”
FirstGroup said David Robbie, a senior independent director, will serve as interim chairman and oversee the process to appoint Mr Hauser’s successor.
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