Genco Shipping & Trading has won key support from a leading shareholder advisory firm in its proxy fight with activist investor George Economou, the Greek shipowner.
The Manhattan-based bulker owner said on Wednesday that Institutional Shareholder Services (ISS) has recommended that shareholders vote for each of Genco’s seven director nominees and against Economou’s insurgent nominee Robert Pons at the 23 May annual meeting.
Genco said in a prepared release after the closing of trading on the New York Stock Exchange that ISS found that Economou, a holder of about 5% of Genco shares, had failed to make a persuasive case.
“The dissident [Economou] has since provided limited disclosure regarding his effort to unseat the company’s chairman,” ISS said, according to the Genco disclosure.
“As the dissident has failed to articulate a compelling case for change, shareholders are recommended to withhold votes for dissident nominee Robert Pons.”
The advisory firm also found that Economou had sold off parts of what once was a 5.4% shareholding since late April.
ISS recommended a vote in favour of the seven Genco director nominees, including longtime chairman James Dolphin, whom Economou has sought to remove from the board.
Genco said ISS had commented positively on its progress in delivering value to all shareholders.
Besides Dolphin, the directors seeking re-election are Paramita Das, Kathleen Haines, Basil Mavroleon, Karin Orsel, Arthur Regan and chief executive John Wobensmith.
Economou has, among other things, criticised Genco’s share price in relation to its net asset value and the purported intransigence of management and board in addressing his recommendations, with particular focus on Dolphin as chairman.
Economou has advocated that Genco consider stock buybacks, a plan that management has rejected in favour of a strategy of substantial dividend payouts.
The Greek has over the past year taken shareholding positions in several New York-listed shipowners, most of them also Greek, and sought to undo what he has called ownership structures that reflect poor governance.
Economou — himself regarded as a career governance laggard — has filed lawsuits against Performance Shipping in New York Supreme Court and Seanergy Maritime in the Marshall Islands.
