Viterra Inc. responded to the scathing rebuke from its largest shareholder, Alberta Investment Management Co., on Wednesday – well, sort of. It "acknowledged" AIMCo's press release, ensured investors that its board is "comprised of the very best directors it can identify" and said that it has indeed engaged outside firms for advice on the board renewal process. However, as for responding directly to the statements make by AIMCo, Viterra deferred at this time.
The back-and-forth press releases started on Tuesday, when AIMCo – which owns a 17 per cent slice of Viterra – called the company's board of directors "unresponsive and unaligned." It also said that it does not believe that the current board "has the required skills or experience to meet the company's leadership needs as a growing international agribusiness."
Chris Damas at BCMI Research, an independent equity research and trading company based in Barrie, Ont., couldn't agree more.
"It was with only a little surprise that I saw AIMCo's announcement. My main surprise was it has taken so long for this story to get out there," he said in an e-mail.
"After much communication with their [investor relations] it became my conclusion Viterra senior management couldn't really care less about the stock price, and especially the small shareholder."
One of his contentions is that the company's key executives look as though they have a lot of skin in the game, in terms of their share holdings, yet these holdings come largely from compensation rather than their own purchases. And compensation has been tied to earnings (before interest, taxes and depreciation) rather than share price performance.
Now, this may not be unusual in the corporate world. However, with Viterra's share price essentially treading water, investors are starting to get vocal.
David Berman