File photo of Fairfax Financial Chairman and Chief Executive Officer Prem Watsa.© Aaron Harris / Reuters
Fairfax Financial Holdings Ltd. is delaying a special meeting to decide the future of chief executive Prem Watsa.
The Toronto-based insurance and investment company said Monday it will postpone by three weeks its decision on whether Mr. Watsa should be able to lock in his current 41.8 per cent voting control, even as the company issues more equity over time.
The company proposed the change back in June. At the time Mr. Watsa also said he would stay in his role as chief executive for another decade, never sell any of his multiple-voting shares, cap his pay and refuse any bonuses.
Fairfax has long had its dual class share structure in place, and said that increasing the number of votes attached to the multiple voting shares would protect its culture and dissuade other firms from launching takeover attempts.
A special meeting on the changes was set to take place tomorrow, but the Fairfax management team also wants to keep talking to shareholders, the company said in a press release, adding that a significant number of investors' shares have not been voted on the matter.
"We encourage the numerous shareholders who have not yet voted on this proposed amendment to do so," said Mr. Watsa in a statement. "We believe that this amendment is in the best interests of Fairfax and its shareholders."
When Fairfax first proposed to amend the multiple-voting-share privileges, the company said it had consulted with many of its largest shareholders to gather support for the change. Now it needs to confer with more of the smaller shareholders.
Meanwhile, the Canada Pension Plan Investment Board has come out as opposed to the changes. The pension fund's guidance on proxy voting indicates that it will vote against widening "the disparity in voting power between the company's share classes," despite the "positive elements" the amendments include. CPPIB is a large institutional voice in Canada, even if the pension fund does not rank within the largest 100 Fairfax shareholders.
A special meeting will now be held on on Aug. 13.