| FAQ / Case study

FAQ / Case Study

CEO

Shareholder Activism

Audit analytics

New CEO

What are Ranks?

The Rank #1 contains list of companies that appointed new CEOs who have strong track record.

Example: If a major shareholder appoints his representative as new CEO, if the new CEO has experience in turnaround or selling companies or when a CEO joins a smaller company compared to his previous role, it is shown in ‘#1″.

 

The “Rank #2 contains both positive situation and negative situation. Example” If the CEO has “questionable track record, or “mixed performance” it is given #2 rank. Also, if the company’s revenue is declining consistently for few quarters the company is labeled “Rank #2”

Red flag #1 Directors resignation letter

Basics

At the time of resignation, some Directors send a letter expressing their disappointment. The letters contain few “problems” that give rise to “red flag”.

Examples:

In March 2017, Chet Kapoor, Managing Partner of Tenzing Global Investors resigned from the Board expressing dissatisfaction about the “bloated cost structure” and “poor governance”.  He wrote, “The Board’s refusal to engage with us on almost all of these topics and to ask us to sign up to another two year standstill in exchange for one Board seat illustrates to us that the Board is not focused on creating long-term shareholder value”.

In another instance, a Director of New York REIT slammed the non-executive Chairman for extending the agreement with Old Advisor.

I believe it was mistake to extend the Old Advisor at its excessive fee structure. Recall that the Old Advisor presided over multiple failed M&A transactions, a default on our corporate debt during the fourth quarter and a write down of over $50 million on the Viceroy Hotel asset. Given the number of related party relationships that have existed between the company and AR Global, I believe that continuing the company’s relationship with the Old Advisor on any basis for any period of time smacks of a conflict of interest.