Proxy adviser Glass Lewis & Co on Wednesday recommended voting against the reappointment of Detour Gold Corp Chairman Alex Morrison and one more member, while adding an additional nominee from Paulson & Co, instead of a board overhaul pushed by the U.S. activist investment firm.
Detour’s existing management has been resisting Paulson’s push for a board shakeup and the immediate dismissal of interim Chief Executive Officer Michael Kenyon and Chairman Morrison. Paulson has about 6 percent stake in Detour.
“We ultimately see validity in Paulson’s central thesis that, for substantive change to take hold at the company, certain of the core and long-term directors who have presided over value destruction and overseen technical failures of prior mine plans need to be replaced,” Glass Lewis said.
The company’s directors have been unable to recruit a management team that has proven capable of realizing the inherent value of the company’s Detour Lake mine, despite commercial production starting more than five years ago, it said.
The proxy adviser also recommended naming former Kirkland Lake Gold Inc’s executive Dawn Whittaker in place of Chairman Morrison and said it had no issues with Kenyon running the company on an interim basis as long as the miner was looking for a permanent replacement.
The Canadian miner’s proposals for the shareholder meeting on December 11 include approval of two Paulson nominees to the board.
Institutional Shareholder Services Inc on Monday had advised shareholders to vote for these nominees.
Detour is under pressure from two other investors, U.S. investment company Coast Capital Management LP and U.S. hedge fund Livermore Partners, to overhaul its board and consider a sale.
(Reporting By Aparajita Saxena and Laharee Chatterjee in Bengaluru; Editing by Anil D’Silva)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)