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Agrium is dangling the prospect of a payment of 25 cents a share to brokers.
Agrium is dangling the prospect of a payment of 25 cents a share to brokers.
(Jeff McIntosh/The Canadian Press)

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Agrium’s broker fee fails to pass the smell test

Let’s get this straight right off the top – Agrium Inc. is not buying votes in its fight against a dissident shareholder, because that would be illegal. The way Agrium and other parties pay for votes in Canadian takeovers and proxy battles is perfectly legal.

That’s the problem.

Agrium is dangling the prospect of a payment of 25 cents a share to brokers whose clients vote for the Agrium slate of directors over the slate of directors put forward by Jana Partners, a hedge fund. Investment advisers can earn a minimum of $100 and a maximum of $1,500 for each retail client that supports the fertilizer company’s nominees – but only if Agrium wins. A broker with a solid roster of clients who own Agrium stock could bring in a substantial payday.