Stock Market

ISS advises Aerojet shareholders to back the CEO in a bitter proxy battle.

Boston (Reuters) -Institutional Shareholder Services (ISS), a well-known proxy advisory firm, backed Aerojet Rocketdyne Holdings (NYSE: AJRD) Inc. CEO’s eight-person board of directors slate on Friday. This was bad news for the executive chairman of the U.S. rocket maker, who also wants to control the board.

Warren Lichtenstein, who is the executive chairman, and Eileen Drake, who is the chief executive, each put forward eight people to be board members.

On June 30, investors will vote on who should be a director.

“A board free of Lichtenstein’s direct influence is best, but either slate would be better than the current situation,” ISS wrote.

But ISS thinks Lichtenstein’s seat should go to someone else. “He might have a place at AJRD, but it’s not on the board right now.”

Since a plan to sell Aerojet to Lockheed Martin Corp (NYSE:LMT), the company’s biggest customer, fell through, the fight between Drake and Lichtenstein, whose Steel Partners and affiliates own more than 5% of the company, has gotten worse.

The ISS report came out a day after a judge in the Delaware Chancery Court said that Drake had broken a court order by using company money to support her candidates.

On Friday, a spokesman for Lichtenstein repeated his statement from Thursday, asking how shareholders could trust Drake now that the judge said she “misused corporate resources to try to get control of the board.”

A representative for Drake didn’t answer right away when asked for a comment.

Drake offered to settle and resign for $48 million, which is almost twice as much as the $25 million she would get if there was a change of control now.

Lichtenstein said that the share price needs to go up and bring in new buyers. To do this, he said, operational improvements and changes to how capital is used are needed. He wants to make Mark Tucker, who used to be the COO of Aerojet, the new CEO. ISS wrote, “There is still not enough proof to say that Drake has to be replaced.”

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button