Dye and Durham Ltd. DND-T has unveiled a proposed slate of directors ahead of its annual general meeting, set for Dec. 17, and it is substantially different than the legal-software company’s last elected board.
Four of its seven proposed directors would be newcomers to its board, including Marc Ernst, a former chief operating officer with financial-technology giant Fiserv Inc. and, before that, the chief executive officer of H&R Block Inc., and David Oppenheimer, the president and chief financial officer of Oppenheimer Advisors. New York hedge-fund manager Eric Shahinian is the nominee of former D&D chairman Tyler Proud, the brother of CEO Matt Proud, under a shareholder-rights agreement with his personal holding company, OneMove Capital Ltd. And Luke McCormick, the managing director of investments and a partner with Toronto’s Generation Capital, is also nominated under a peace deal with one of D&D’s activist investors, Blacksheep Fund Management Ltd., after the Irish hedge fund pushed to elect its own nominee.
The remaining three nominees are Ted Prittie – who has been on D&D’s board since it went public in July, 2020 – chair Colleen Moorehead and Matt Proud. Ms. Moorehead was nominated and elected last year at the behest of dissatisfied shareholders who successfully lobbied for two other incumbent directors not to run again – punishment for their role in awarding the CEO a rich compensation package in 2021.
Mr. Prittie was OneMove’s nominee in past elections, but Tyler Proud’s holding company attempted unsuccessfully this year to get shareholders to vote him off at a special meeting and replace him with Mr. Shahinian. In what will likely be interpreted as a fraternal snub, Mr. Prittie has been nominated by Matt Proud’s personal holding company as per his rights in the shareholder agreement, after a falling out with his brother over D&D’s strategy, governance and performance.
“The nominees represent a substantial refreshment of the board since the 2023 annual meeting, balanced by the retention of critical institutional memory,” D&D said in a release Tuesday. The company said its nominees “are the outcome of extensive engagement with shareholders” and include names recommended by shareholders for their relevant track records.
Activist shareholder Engine Capital LP has proposed a rival slate of six directors, which the company rejected last week on technical grounds, giving the New York hedge fund until Wednesday at 5 p.m. to refile with more information, including the names of other dissidents it may be working with. That follows two unsuccessful attempts by D&D to use a Competition Bureau investigation for alleged trade-restricting practices to entrench management and directors in the face of Engine’s governance challenge.
Engine sought earlier this year to replace three of D&D’s seven directors with its own nominees at a special meeting, which was postponed because of a separate court challenge by OneMove. Last week Engine, which owns 7.1 per cent of D&D stock, expanded its challenge, proposing to replace nearly the entire board and “rebuild a top-performing executive team,” which was seen as an explicit threat to oust the CEO.
Five of Engine’s candidates – not including its founder, Arnaud Ajdler – have senior-executive experience with public companies, including two from the legal information services space: Hans Gieskes, a former CEO of RELX PLC’s LexisNexis Group, and Anthony Kinnear, a former president of Thomson Reuters Corp.’s legal professionals unit. The others are Tracey Keates, a former chief financial officer of Constellation Software Inc. unit Jonas Software; Ritu Khanna, Shopify Inc.’s global partnerships vice-president; and Sid Singh, the CEO of Rectangle Health and a former executive with Equifax Inc. and Global Payments Inc.
It has been a tumultuous 12 months for D&D, which since last fall has faced four governance challenges, refinanced its high debt, cut staff and launched a strategic review that could lead to the company’s sale. Other investors, including Tyler Proud, have expressed discontent over its debt, pace of acquisitions, board oversight over management and rich compensation to the CEO while its stock has remained at depressed levels.