Capital Senior Living shareholder Cove Street Capital plans to vote against all three people up for election or re-election to the senior living company’s board at its May 14 annual meeting of stockholders “to send a simple message about the state and stewardship of our investment.”
The investment adviser owns approximately 10% of Capital common stock, according to a filing with the Securities and Exchange Commission.
Cove Street Principal Jeffrey Bronchick, in an April 9 letter to Capital President and CEO Kimberly Lody filed with the SEC, complained that Capital did not consider its recommendation of someone to join the board.
Bronchick’s letter panned the board’s choice of Steven Plochocki, the former director and CEO of Quality Systems (now known as NextGen Healthcare) for the board seat. “[T]here is little in our view within his record to suggest that he is ‘new blood’ to change what has clearly been a Board of Directors that until VERY recently, has not been holding anyone accountable for performance,” he wrote.
Up for re-election to the board this year are Philip A. Brooks, who is a principal investor and managing partner in Select Living and a portfolio adviser to venture capital firm NRV, and Ed A. Grier, who is the dean of the Virginia Commonwealth University School of Business.
Bronchick also said that Cove Street was “extremely disappointed” that Capital’s board did not consider its suggestion to de-stagger board member elections until all board members are elected annually, which he described as “basic corporate governance in the 21st century.”
“What we can both agree on is the need for operational improvement on the ground and we are hopeful that new CEO Kimberly Lody has what it takes and has the opportunity to operate in an environment that is conducive to our joint success,” Bronchick told the board.
Bronchick also wrote a letter to the Capital board in January, days after Lody was named president and CEO, to recommend board-related changes.