Opposition builds against Bombardier’s dual-class share structure
April 11, 2019 - by NICOLAS VAN PRAET, DAVID MILSTEAD for The Globe and Mail
Two proxy advisory firms are backing a proposal to abolish Bombardier Inc.'s dual-class share structure in a move that could reignite investor opposition to the founding family's control over the Canadian plane and train maker.
In separate reports published earlier this month, Institutional Shareholder Services and Glass Lewis say they support a shareholder proposal put forward by Montreal-based investor rights group Médac to end the capital structure in place at Bombardier since 1980.
The endorsement sets up what could be a lively debate ahead of the company's annual meeting on May 2. Even if the effort is unlikely to succeed because it doesn't meet proper procedure, it will send a message to Bombardier that the uneven voting power at the company remains an irritant that some investors are keen to do away with...
"While companies sometimes defend the practice by claiming that it insulates managers from short-term pressures and allows them to make decisions that are best for the long-term, in this case it appears the company's share price has performed poorly over the long-term," Institutional Shareholder Services said, citing a chart showing Bombardier's stock price has languished at less than $10 for nearly 17 years.