ISS Recommends SBS Shareholders Withhold Vote For Directors
May 29, 2008 at 5:37 AM (PT)
SPANISH BROADCASTING SYSTEM INC. stockholder DISCOVERY GROUP has previously said that it will not vote in favor of the reelection of the Company’s directors at its annual meeting on JUNE 3rd, and now it has support from influential proxy advisor INSTITUTIONAL SHAREHOLDER SERVICES, which issued a report recommending that SBS stockholders follow DISCOVERY's lead and withhold their votes for the 2008 director nominees.
In the report, ISS says that "change is needed at the company," criticizing the company's governance structure and stock transactions that ISS says raises the question of "whether the interests of the Class A common shareholders are subordinate to the interest of the ALARCON family."
The ISS report says that its recommendation is based on SBS' failure to establish sound corporate governance practices; failure to link compensation to performance; failure to establish an independent nominating committee; failure to establish a majority independent board; and poor board meeting attendance, in the case of President/CEO RAUL ALARCON JR.'s father.