The Ontario Teachers' Pension Plan won't be backing some members of Magna International Inc.’s board of directors at the auto parts maker's annual general meeting Thursday.
Teachers said Tuesday that it plans to withhold votes for all directors who served on the board when the controversial decision was made in 2010 to buy out founder Frank Stronach's controlling stake for $863-million (U.S.) and collapse the company's dual-class share structure.
“We continue to believe that these directors failed to satisfactorily represent the interests of the corporation and all shareholders and, as a result, have lost confidence in their ability to act in the best long-term interest of the corporation,” the major pension fund said on its website.
“We continue to have serious concerns about the compensation practices, particularly with respect to Frank Stronach and the allocation of pre-tax profits to executives, which in our view do not align the interests of shareholders and management.”
Teachers will also vote against the Aurora, Ont.,-based company's proposal on executive compensation.
In its proxy circular filed in March, Magna said former Ontario premier Mike Harris is exiting his role as chairman and that two other directors, Louis Lataif and Donald Resnick, also won't stand for re-election.
Following a lawsuit from some major investors, Magna disclosed in December that Mr. Harris, Mr. Lataif and Mr. Resnick received just 38 per cent shareholder support at last year's annual meeting.
Those three directors oversaw the controversial deal to buy out Mr. Stronach's controlling stake in cash and shares at a premium of about 1,800 per cent.
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