After two years of shareholder revolt, Laurent Dassault could have looked forward to a smooth re-election to the board of Power Corp. of Canada this year. Instead, he will not return.
Mr. Dassault – the company's longest-serving board member aside from founding family members André and Paul Desmarais – will not stand for re-election at Power Corp.'s annual meeting in May, the company has disclosed in its proxy circular sent to shareholders.
In the past two director elections, in 2014 and 2015, Power Corp. shareholders have withheld roughly 20 per cent of the vote from Mr. Dassault. (In most director elections, the options are "for" and "withhold," as opposed to "against.")
The major proxy advisory services, Institutional Shareholder Services and Glass Lewis & Co., as well as Canada's Shareholder Association for Research and Education, recommended against his candidacy those years because he failed to attend at least 75 per cent of the company's meetings in 2013 and 2014.
Mr. Dassault, the chief executive officer of an investment and financing company in Paris, made three of six board meetings in 2013 and three of five in 2014. As for board committees, he attended just one of three such meetings in 2013 and missed his only committee meeting in 2014.
A Globe and Mail review last year of Mr. Dassault's attendance found he attended at least 75 per cent of Power Corp. board meetings in just four of 13 years from 2002 to 2014, the years in which Power Corp. disclosed director attendance in its proxy circular. His overall attendance rate was 67 per cent. He collected $1.2-million in director fees during that time. (Mr. Dassault has served for 17 years.)
However, Mr. Dassault's attendance actually improved in 2015, as he attended five of the six meetings of the board of directors and one of the two meetings of the related party and conduct review committee. The proxy advisory services don't weigh in on directors who don't stand for re-election, but there's no reason to believe his 2015 attendance would have prompted any "withhold" recommendations.
Stéphane Lemay, Power Corp.'s general counsel and corporate secretary, says the company's board "aims to renew its membership from time to time. … We value the contribution made by Mr. Dassault on many different matters during his 17-year tenure, including matters related to our European investments. We are proud of the relationship that we have built with Mr. Dassault and his family over all these years; this relationship will continue in the future."
Mr. Dassault's negative votes are noteworthy because the Desmarais Family Residuary Trust, a vehicle for the founding family's ownership, has 59.2 per cent of the votes at the company, largely through a preferred class of supervoting shares. Assuming it voted for Mr. Dassault, roughly half of non-insider shareholders withheld their votes from him in the prior two elections.
There are many instances in these so-called "controlled" companies where it's questionable whether minority shareholders have much influence. But with Mr. Dassault's departure, as well as recent changes at Quebecor, it seems the roars of the unhappy stockholders are being heard.