LOS ANGELES - In a significant development for Gildan Activewear Inc . (NYSE: NYSE:GIL) (TSX: GIL), both Glass, Lewis & Co. and Institutional Shareholder Services Inc. (ISS) have recommended that shareholders vote for the election of all eight director candidates proposed by Browning West, LP at the Annual Meeting of Shareholders scheduled for May 28, 2024.
Browning West, which holds approximately 5% of Gildan's shares, has been advocating for change at the company following the board's decision to remove former CEO Glenn Chamandy in December 2023.
The advisory firms also advised shareholders to withhold support for the current 10-member board, including Chair Tim Hodgson and CEO Vince Tyra. Moreover, Glass Lewis has recommended voting against Gildan's proposed executive compensation plan, citing misalignment with shareholder interests.
Glass Lewis criticized the incumbent board for what it perceived as a poorly reasoned decision to replace a CEO with a favorable track record. The proxy firm highlighted the opposition from several top shareholders to the board's decision and suggested that Browning West's nominees offer a more compelling path forward for Gildan.
Browning West's representatives, Usman S. Nabi and Peter M. Lee, expressed gratitude for the support of the proxy advisory firms and emphasized the potential value their nominees could bring to the company. They also reiterated the goal of reinstating Chamandy as CEO to resolve what they describe as an unfortunate chapter in Gildan's history.
This news is based on a press release statement from Browning West.
InvestingPro Insights
In light of the upcoming shareholder meeting and the recommendations by Glass, Lewis & Co. and ISS, investors in Gildan Activewear Inc. (NYSE: GIL) may be considering the future financial health and strategic direction of the company. Here are some insights based on real-time data and InvestingPro Tips that may be relevant to shareholders:
- Gildan's management has been actively involved in returning value to shareholders, as evidenced by their aggressive share buyback strategy. This could be a sign of confidence from management in the company's intrinsic value.
- The company has a commendable record of maintaining and raising its dividend, with an increase for 3 consecutive years and consistent payments for 14 years. This may appeal to income-focused investors, especially considering the current dividend yield of 2.32%.
InvestingPro Data metrics provide further context to Gildan's financial situation:
- The company's market capitalization stands at 5960M USD, reflecting its size and presence in the market.
- With a P/E ratio of 11.98 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at 13.05, Gildan is trading at a valuation that suggests a balance between its earnings and market expectations.
- The revenue growth has been modest at 0.64% over the last twelve months as of Q1 2024, indicating stable, albeit slow, top-line expansion.
Investors considering the strategic implications of the board's composition and the potential reinstatement of former CEO Glenn Chamandy can factor in these financial metrics and InvestingPro Tips. For those seeking additional insights, there are more tips available on InvestingPro, which can be accessed with a special offer using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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