Legion Partners Holdings LLC and the California State Teacher’s Retirement System have shelved plans for the proxy fight they were planning to wage at Perry Ellis International Inc.’s annual meeting in July.
Legion and CalSTRS said they were “pleased” with the company’s nomination of former PVH Corp. chief executive office Bruce Klatsky and former Justice ceo Michael Rayden to replace two long-serving incumbent directors. “We believe their relevant experience and record of building value at other companies will bring positive change to the boardroom,” said Legion’s Chris Kiper. “In recognition of the company moving in the overall direction of our recommendations, we are withdrawing our slate of director nominees for election to the board at the annual meeting.”
The activists’ nominees were Robert Mettler, Darrell Ross and Joshua Schechter.
He noted that the replacement of a total of five long-standing directors with five independent directors in the past 18 months wouldn’t have occurred “without our active and ongoing involvement on behalf of all shareholders.”
Last week, Perry Ellis said that George Feldenkreis would relinquish the role of ceo at the end of the fiscal year in January and stay on as chairman with his son Oscar, president and chief operating officer, succeeding him in the ceo role. That fulfilled Legion and CalSTRS’ wish that the roles of chairman and ceo be separated.
CalSTRS’ proposal that the Perry Ellis board be declassified, with all directors standing for a vote annually, will be presented to shareholders at the annual meeting. A proposal for an independent chairman was also withdrawn in the wake of the proposed shift in the ceo post.
Perry Ellis had previously acted on some of the Legion/CalSTRS recommendations that began arriving in the company’s boardroom last summer, including the reassessment of all related-party transactions and termination of certain related-party transactions.
The two parties, which together own 6.2 percent of the company’s common stock, also noted that the company’s stock price had increased 52 percent since they first began agitating for change at the firm on July 17.
George Feldenkreis took satisfaction that, “as we move beyond the distraction of a proxy contest, we will now be able to focus all the efforts of our board and management team on continuing to further our strategic initiatives to create more value for our stakeholders.”
The independent members of the company’s board said, “We appreciate the constructive dialogue we have had with our shareholders on a variety of issues in recent months.” With the presumed elections of Klatsky and Rayden, they noted, the board would be composed of seven “highly qualifed and experienced directors, five of whom would be independent.”