Effort to oust Barrett board members continues
Shareholder vote could take place next month
Tuesday, January 31, 2012
The fight over the direction of Vancouver-based Barrett Business Services Inc. took another turn Tuesday, with a shareholder group calling for a new date on which to vote on ousting board members and the company denying it ever opposed having such a meeting.
In a preliminary proxy statement filed Tuesday with the U.S. Securities and Exchange Commission, Kimberly Sherertz, who wants to remove five of the company’s six board members, said she now wants to hold a special shareholder meeting at 11 a.m. March 13 at the Heathman Lodge in Vancouver.
Sherertz is the widow of former BBSI CEO William Sherertz, who died unexpectedly last January. She was appointed sole representative of the estate of her late husband. She controls roughly 25 percent of the company’s outstanding shares.
Citing concerns about the company’s executive pay policies and its board leadership, Sherertz wants to replace the five directors with seven new directors.
Sherertz’s SEC filing on Tuesday followed another one she recorded Monday. In her Monday filing, she said BBSI rejected her request for a special meeting on Feb. 21 because it was “legally insufficient” under Maryland law, where BBSI is incorporated.
The company counter-punched on Tuesday, saying in an SEC filing that it “continues to be willing to act upon a request for a special meeting of stockholders” if BBSI receives a request from Sherertz and her shareholder group “that complies with Maryland law and BBSI’s bylaws.”
The company’s board “has never stated publicly or privately that it will not call a special meeting of stockholders,” Anthony Meeker, BBSI’s board chairman, said in a news release. “In fact, management and the board have been diligently preparing for such a meeting in light of repeated statements by Ms. Sherertz’s attorneys, as recently as last Friday, that a revised request from holders of record of the required percentage of shares would be submitted shortly.”
Meeker said that for Sherertz and her advisers “to act as if we denied a valid request is misleading to our other shareholders.”
In her SEC filing Tuesday, Sherertz apparently submitted her revised request. She said she has asked through Cede & Co. — the shareholder of record — that the company convene a special meeting on March 13 to vote on her request to replace certain board directors.
Cede & Co. is a New York City-based clearinghouse for stock transactions, according to Bloomberg Businessweek.
In a phone interview Tuesday, Paul Schulman — executive vice president for MacKenzie Partners, Inc., which is working with BBSI to help guide it through the proxy solicitation process — said that to his knowledge the company “had not yet received the revised request that (Sherertz) references in her proxy material.”
The flurry of dueling SEC filings and news releases underscores the ongoing flap over corporate governance at BBSI, which provides human resource outsourcing and professional management consulting services.
Sherertz and other investors 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.
Sherertz wants to expand BBSI’s six-member board to eight, retain Elich and replace the other board members with new directors.
In a previous news release, the company said it’s sympathetic to “the burdens that Bill’s passing has placed on his family” and that it continues to offer its support “to Ms. Sherertz as she works through the tax and other issues facing his estate. We also believe strongly that the course she is currently pursuing to replace all but one board member with her handpicked nominees is ill-advised and contrary to the best interests of the company and its other shareholders.”
In 2010, BBSI had $273.12 million in revenue. Barrett Business Services’ stock, which trades as BBSI on the Nasdaq exchange, closed up 1.64 percent Tuesday, at $19.25 per share.