Star Equity Fund Issues Statement on Gyrodyne’s 2022 AGM
30 Agosto 2022 - 7:30AM
Star Equity Fund, LP (“Star Equity Fund” or “we”), a 5% shareholder
of Gyrodyne, LLC (Nasdaq: GYRO) (“Gyrodyne” or the “Company”) that
seeks to unlock shareholder value and improve corporate governance
at its portfolio companies, responds today to the results of
Gyrodyne’s 2022 Annual General Meeting of Shareholders (“AGM”)
where the majority of Gyrodyne shareholders voted in solidarity
with our views.
On August 1, we issued a press release
announcing our intentions to vote WITHHOLD on the re-election of
incumbent board members Paul Lamb and Richard Smith due to their
track record of poor corporate governance at Gyrodyne. We also
announced our intention to vote AGAINST the Company’s executive
compensation as a signal to Gyrodyne’s incumbent board of directors
(the “Board”) on the poor structure of its Retention Bonus Plan
(the “Bonus Plan”). Furthermore, proxy advisory firms ISS and Glass
Lewis both independently recommended voting in line with our
announced intentions.
On August 24, 2022, the Company held its AGM,
and a staggering 56% of votes cast voted WITHHOLD
on the reelection of both Lamb and Smith. This WITHHOLD rate
represents a continuation of growing shareholder frustration,
having increased from 34% in 2020 to 40% in 2021. In fact, many
companies have auto-resignation provisions in their bylaws
requiring resignation if the WITHHOLD vote is greater than 50%. In
addition, 57% of votes cast voted against the
approval of the Company’s executive compensation in a non-binding
advisory vote, another sign of significant shareholder
frustration.
It is abundantly clear that Gyrodyne’s Board
lacks shareholder support. For years, shareholders have endured
value destruction and neglect at the hands of a misaligned Board,
who receives an egregious 65% of the payout under the Bonus Plan.
Additionally, the Board has amended the Bonus Plan so that it
cannot be materially modified, suspended, or terminated and has
done so without shareholder approval. We believe this plan unfairly
benefits a poorly performing Board to the detriment of
shareholders, and the Company’s Board and management should instead
own stock. We continue to believe the Board is incentivized to
protract the dissolution of the Company because they receive
compensation in the interim and are more concerned with maximizing
their bonus payout under the Bonus Plan rather than maximizing net
present value for shareholders.
Although we are pleased that shareholders voted
in alignment with our views, this is only a first step. We maintain
our commitment to advocate for the interests of all Gyrodyne
shareholders and remain ready to act accordingly in the future.
About Star Equity Fund, LPStar
Equity Fund, LP is an investment fund managed by Star Equity
Holdings, Inc. Star Equity Fund seeks to unlock shareholder value
and improve corporate governance at its portfolio companies.
About Star Equity Holdings,
Inc.Star Equity Holdings, Inc. is a diversified holding
company with three divisions: Healthcare, Construction, and
Investments.
For more information contact: |
Star
Equity Fund, LP |
|
The
Equity Group |
Jeffrey E. Eberwein |
|
Lena Cati |
Portfolio Manager |
|
Senior Vice President |
203-489-9501 |
|
212-836-9611 |
jeff.eberwein@starequity.com |
|
lcati@equityny.com |
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