Shareholders seeking to oust all but one of the directors of Vancouver-based Barrett Business Services Inc. are accusing the company’s board of ignoring their requests to discuss changes to executive compensation rules.
The failure of company directors to respond to the requests of a shareholder group led by Kimberly Sherertz “is a patent breach of fiduciary duty … for which they shall be held accountable,” according to the group’s filing last week with the U.S. Securities and Exchange Commission.
The SEC filing is the latest salvo fired by Sherertz in a proxy battle she launched on Nov. 21 against five of the six board directors who oversee BBSI, which provides human resource outsourcing and professional management consulting services.
Sherertz and several other investors, who collectively own about 26 percent of common shares in the company, argue BBSI’s board has too small a financial stake in the business and too little knowledge of the industry it manages.
The critics have also slammed the board for authorizing a contract with CEO Michael Elich that would pay him three times his combined salary and bonus in certain situations — though they have also publicly stated their support for Elich and the company’s branch managers.
In its Jan. 13 SEC filing, the shareholder group says BBSI “has continuously ignored requests” to discuss one of the group’s key objectives: to have the board adjust the company’s “Change in Control Agreements” — rules spelling out how executives will be compensated in case the company is acquired by another firm.
The current rules “are not in line with industry best practices and could materially damage shareholder value” if they’re not changed, according to Sherertz and other investors.
The critics are calling for a special meeting of shareholders on Feb. 21 to expand BBSI’s six-member board to eight seats, keeping Elich and replacing the other board members with new directors.
According to its most recent SEC filing, the shareholder group led by Sherertz believes “that the incumbent board’s attempt to potentially block the requested special meeting is incredibly detrimental to BBSI stockholders.”
Sherertz is the widow of former BBSI CEO William Sherertz, 64, who died unexpectedly in January 2011. She was appointed sole representative of the estate of her late husband.