Just days in advance of Casella Waste Systems’ annual meeting, activist investor JCP Investment Management announced it was withdrawing its competing slate of directors for the firm.
In a statement, JCP declared satisfaction with a list of recent moves that Casella has made, including several changes with the firm’s board and its corporate governance.
"We are gratified to have served as the catalyst for these positive first steps in the right direction and are inclined to give the new board a chance to deliver on its promises to shareholders,” James Pappas, managing member of JCP, said in a statement. “In that regard we have decided to withdraw our nomination of directors ensuring the election of the incumbent slate. We believe this will position us well to monitor the progress of the board's current plan and we fully expect shareholders to hold the board and management accountable for any failure to deliver on their plan - now and in the future.”
JCP, citing the “strong support” it received from shareholders for its withdrawn slate, is continuing to push for several more reforms, including that Casella undertake a strategic review and consider a sale of the company, declassify its board structure and allow for annual accountability of directors and to increase the representation on the Board of Class A public shareholders.
In response to the announcement, Casella issued its own statement:
“The strategic changes that we started making in 2012, and which preceded JCP’s interest in Casella by almost two years, and the significant improvements in our financial and operating performance which we have been very proud to report to our stockholders, together with the significant refreshment of our Board which has included the additions of waste management industry veterans, James E. O’Connor and William P. Hulligan, as independent directors, the appointment of Mr. O’Connor as our Board’s new lead independent director, and the other significant corporate governance enhancements that our Board has adopted have clearly resonated with Casella’s stockholders. JCP’s 11th hour concession reflects the feedback we, and undoubtedly JCP, have received regarding Casella’s strategic direction, the substantial progress we have achieved in improving our financial and operating performance, our refreshed Board and the new independent Board leadership that is now in place to oversee our strategic trajectory.”
For more on the fight, check our interview with analyst Michael E. Hoffman.