Call it The Case of the Missing Director.
Robert Gemmell, the chair of Agnico Eagle Mines Ltd.’s AEM-T compensation committee, was in trouble. The two major proxy-advisory services recommended that shareholders withhold their votes from Mr. Gemmell in the director election at last Friday’s annual general meeting because of the miner’s compensation practices. This, after two consecutive years of also recommending a “no” on the “say-on-pay” vote.
Would Agnico shareholders take the advice to hold Mr. Gemmell accountable by giving him less than 50 per cent of the votes in the director election – a rare occurrence in Canadian corporate governance?
The result of the vote was just as disastrous as in 2022. Agnico had the ignominious distinction of having the worst result on any say-on-pay vote in Canada last year, with just 24 per cent of shareholders voting in the affirmative. This year, the company managed to eke out an extra point and get 25 per cent support in the non-binding advisory vote.
But as for whether Mr. Gemmell, a retired investment banker from Citigroup’s Canadian operations, would receive a similar rebuke, we will never know. And that’s bad news for shareholders of another company where Mr. Gemmell still serves: Rogers Communications Inc., where he’s the lead independent director.
Agnico shareholders received a proxy circular and ballot this spring that featured Mr. Gemmell as one of 12 nominees for the board of directors, and proceeded to vote accordingly. But as Agnico executive chairman Sean Boyd presided over the shareholder meeting Friday, he said the company’s board “has determined that the total number of directors to be elected at this meeting is 11.”
And when the company announced the voting results late Friday night, Mr. Gemmell was nowhere to be found.
Late Monday, Agnico Eagle provided me with a direct answer to my weekend pestering. Mr. Gemmell, the company tells me, decided just before the annual meeting to not stand for re-election after talking to shareholders in the weeks leading up to the meeting.
Chris Vollmershausen, the company’s general counsel and corporate secretary, said Mr. Gemmell “determined that the support for Agnico’s 2022 compensation practices was unsatisfactory.” Mr. Vollmershausen said Mr. Gemmell “felt that it would be in the best interests of the company to withdraw his nomination as director of Agnico Eagle.”
As a result, Mr. Vollmershausen said Mr. Gemmell did not stand for election at the meeting. “As he did not stand for election at the meeting, no voting in respect of Mr. Gemmell occurred.” So the company’s reports to regulators and the public “reflect all of the votes recorded at the AGM.”
Well, that’s a neat trick to avoid losing, and disclosing, a shareholder vote. However, I disagree with the idea that no voting on Mr. Gemmell occurred, as shareholders submitted their proxy votes with Mr. Gemmell’s name right there on the ballot. The votes were cast; Agnico Eagle used his sudden withdrawal as an excuse not to count them.
I’m not interested in corporate lawyers getting all up in my face about how the law was followed here; this is an argument about the spirit of the law, not the letter. Mr. Gemmell’s withdrawal denied shareholders the right to express their views on his stewardship – and the right to know the result.
Why does it matter if he’s gone from the Agnico Eagle board? Well, that brings us back to Rogers.
Mr. Gemmell is the lead independent director at the telecom giant. What’s that? At the risk of oversimplifying, a lead independent director serves as a governance check at companies where the chairman of the board is not independent – for example, serving as CEO in addition to the chairman’s job. Or, as at Rogers, where the chairman, Edward Rogers, is the controlling shareholder.
How’s it going there, governance-wise? Well, proxy adviser Glass Lewis & Co. recommended a “withhold” vote for Mr. Gemmell there, as well, citing the company’s multiclass share structure. Glass Lewis also recommended “withholds” on five other Rogers directors, including Edward Rogers, citing a range of issues including pay practices, gender diversity concerns and insiders sitting on key committees that ought to be fully independent.
Institutional Shareholder Services, another adviser, recommended “withholds” on seven Rogers directors for governance reasons, but Mr. Gemmell was not among them.
Asked about Mr. Gemmell’s status at Rogers given the Agnico situation, Rogers spokeswoman Sarah Schmidt noted his re-election to the Rogers board last week and referred to Agnico’s statement.
Of course, Mr. Gemmell fared well in the Rogers voting: He received 99.99 per cent of the votes – because common shareholders at Rogers get no votes. Edward Rogers controls them all.
With Mr. Gemmell’s resignation from Agnico Eagle, the Rogers role is his only remaining board seat. It’s perfect for him: It’s an election he can never, ever lose.
David Milstead