Following a campaign by activist investors to regain control of the company, all board members of Gildan Activewear have now stepped down and are to be replaced by an eight-member slate of directors proposed by shareholder Browning West.
It puts into place a proposal introduced by the investment firm, which owns around 5.7 percent of the company’s outstanding shares, to add Michael Kneeland, Michener Chandlee, Ghislain Houle, Mélanie Kau, Peter Lee, Karen Stuckey and J.P. Towner to Gildan’s board, as well as reinstate former CEO Glenn Chamandy to the helm position.
Browning had initially aired its frustration at Chamandy’s termination after he was replaced by Vince Tyra towards the end of 2023, warning Gildan that if it did not correct its missteps it intended to requisition a special meeting to reconstitute the board.
While the proposal had received support from other shareholders, Gildan refused to act on the request, stating that Chamandy had “worked to entrench himself as CEO”, a claim that was later disputed by Chamandy, who noted he was not involved in the board’s handling of a succession plan.
Vince Tyra steps down from helm
As such, Browning filed a lawsuit against the company, alleging that it had pursued a “strategy of entrenchment, obfuscation and disparagement of dissenting shareholders” while making “value destructive decisions” and contradictory statements regarding Chamandy’s exit.
Despite this, Gildan’s board continued to pursue a potential takeover bid against the will of Browning and other shareholders as well as a strategy outlined by Tyra and a reshuffling of its board.
Now, however, with the revelation of an entirely new board to be put into place, it appears that Browning and its peers have come out on top, with Tyra terminated and other executives to step down.
Commending Chamandy and noting the scale of the reconstitution aside other investors, Usam Nabi and Peter Lee of Browning said in a joint statement: “We are deeply grateful for the outpouring of support that Browning West’s slate and plan have received from our fellow shareholders, Gildan employees, and leading proxy advisory firms.
“While we are disappointed that the board ignored the clear will of its shareholders for so many months and spent tens of millions of shareholder capital in an effort to defend its mistakes, we are nevertheless gratified that the current board has decided to cease its campaign activities and pave the way for an orderly and conclusive leadership transition.”
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