Days after Capital Senior Living named a new president and CEO, a shareholder is calling for board-level changes at the Dallas company to improve financial results.
New leader Kimberly Lody, whose appointment was announced Jan. 8, “seems like a perfectly reasonable candidate,” Jeffrey Bronchick, principal and portfolio manager at El Segundo, CA-based Cove Street Capital, wrote in a Jan. 11 letter to Capital Board Chairman Michael Reid. The letter was filed Jan. 14 with the Securities and Exchange Commission.
“With that said, it is our strong belief that there needs to be commensurate change at the board level, which ultimately must take at least partial responsibility for the poor results and dismal price of the company’s equity,” Bronchick wrote. The company still has “tremendous value,” he said.
The shareholder is calling for new board members, the de-staggering of board elections beginning this year until all board members are elected annually, and “proper alignment of incentives at both the management and board level.”
De-staggering “is firmly good governance and further aligns all stakeholders,” Bronchick wrote. “It would also send a strong signal to the marketplace that all concerned are putting their collective time and money towards the enhancement of shareholder value.”
As of the close of business on Jan. 11, Cove Street Capital owned more than 2.6 million shares of Capital Senior Living stock, and Bronchick owned 15,000 shares, according to the SEC filing.
Lody said that, as CEO, one of her priorities will be improving the company’s operating performance, which is the company’s biggest current challenge. “There’s a significant sense of urgency around that, and it’s something that the team is fully focused on,” she told McKnight’s Senior Living last week.
Other priorities will be driving occupancy growth, stabilizing rates and strengthening the company’s financial position, Lody said.
Lody succeeded Larry Cohen, who remains a consultant to the company.