Yahoo Finance Parkland CEO's rising pay slammed by U.S. activist investor
Engine Capital has reiterated its request to meet with Parkland's board as soon as possible
A U.S. activist investor is growing impatient with Calgary-based fuel retailer Parkland (PKI.TO).
Engine Capital sent a follow-up letter to the company's board of directors on Thursday, alleging an ignored request for a meeting, and questioning CEO Bob Espey's rising pay.
Engine says it owns about two per cent of Parkland's outstanding shares. The New York-based firm plans to oppose the re-election of Parkland's incumbent directors at the company's upcoming annual meeting.
Engine launched its first salvo against the company last month, calling out "sustained underperformance" versus rivals like Alimentation Couche-Tard (ATD.TO), and an M&A strategy of acquiring non-core assets.
The company's footprint spans thousands of stores and gasoline stations in Canada, the U.S. and the Caribbean under brands like On the Go, Pioneer and Ultramar, as well as frozen food retailer M&M Food Market. Engine's March 22 letter to Parkland's board suggests selling or spinning off its Burnaby, B.C. refinery as part of a transition to a pure-play gas station and convenience store operator.
Engine says it held a meeting on March 30 with Parkland CFO Marcel Teunissen, during which it reiterated its request to meet with the board as soon as possible.
"Engine has engaged with more than 50 boards of directors over the last decade, and we have never encountered a situation where one has been so unresponsive," Engine managing partner Arnaud Ajdler and partner Brad Favreau wrote in a letter published Thursday
"The response from an engaged and competent board of directors should be to engage with a major shareholder, not to hide behind its CFO," Ajdler and Favreau added in the letter. "As of today, we still have yet to hear back about a meeting with Parkland's directors."
Parkland spokesperson Simon Scott said on Thursday that the company has engaged with Engine "frequently over the past several months."
In its latest letter, Engine also took aim at Espey's $5.3 million in direct compensation in 2022, as outlined in company regulatory filings, an increase from $4.3 million the previous year.
"Mr. Espey's compensation has consistently increased over the last few years as the business has grown through M&A and has become more complex – the very issues that are hurting shareholders," Engine wrote.
As part of its push to shake up Parkland's board of directors and limit tenure to 10 years, Engine says it's "disappointed" that chairman Jim Pantelidis intends to add three more years to his 24 years on the board.
Scott notes the company's slate of directors and their compensation have the support of proxy advisory firms ISS and Glass Lewis heading into the May 4 annual shareholder meeting. Simpson Oil, Parkland's largest shareholder, has said it will nominate two directors to the board. Engine on Thursday said that it will support those nominees.
"We appreciate the many expressions of support we have received from our shareholders, including our largest shareholder, both for all our directors and for our overall strategy to build long-term shareholder value," Scott wrote in an email to Yahoo Finance Canada.
Engine adds the nearly 10 per cent increase in Parkland's share price following the release of its March 22 letter "speaks volumes to shareholders' frustration with the status quo and desire for change."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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