Fired Gildan CEO responds to board criticism in open letter
, BNN Bloomberg
GILDAN ACTIVEWEAR INC (GIL:CT)
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks
Gildan Activewear Inc.’s ousted CEO responded to criticism from the company’s board Tuesday, calling their actions a “premeditated” attack on his record that threatens to undermine the business itself.
“I am deeply disappointed by the actions of the Gildan board of directors. Having been at the helm of Gildan for more than two decades, I take great offence at what appears to be a premeditated effort to publicly undermine my record,” Glenn Chamandy said in a statement.
“What is even worse from a corporate standpoint, is that their careless behaviour is also tarnishing the reputation of a great company.”
Chamandy was dismissed by Gildan’s board of directors on Dec. 11. Soon after, several of the company’s biggest investors called for him to be reinstated, including U.S. investment firm Browning West, which owns a five per cent stake in the company.
After Chamandy’s Tuesday statement, Browning West requested a special meeting of Gildan shareholders with the aim of replacing eight of the company’s 11 board members and reinstating Chamandy as CEO -- increasing its previous request to replace five board members.
Chamandy, who had been the company’s chief executive for nearly 20 years, maintains he was fired without cause.
In a statement released Monday, Gildan’s board said they were unanimous in their belief that keeping the longtime executive “would have jeopardized the future of Gildan and destroyed shareholder value.”
The board also reiterated earlier statements that Chamandy forced a showdown over a proposed multibillion-dollar acquisition strategy, and said they were “dubious about these high-risk acquisitions, particularly in light of Mr. Chamandy’s inability to answer even the most basic questions about his strategic proposal.”
Chamandy responded Tuesday by saying that “contrary to what the board claims,” the strategy showed “meaningful organic growth prospects” for the company and was supported by Gildan’s management team.
“The board's unfortunate actions have resulted in a massive loss of shareholder value,” Chamandy’s letter continued.
“This destructive course of action is counterproductive, and all efforts should be redirected at driving growth that benefits all Company stakeholders, a priority which has traditionally been at the core of Gildan's values.”
Since reaching a 2023 high of more than $50 per share in early December prior to Chamandy’s departure, Gildan stock was down more than 17 per cent as of Tuesday morning.
With files from Bloomberg News and the Canadian Press
Gildan board says fired CEO Chamandy was distracted by deals, golf resort
, Bloomberg News
, Bloomberg News
Takeaway for other boards watching Gildan shakeup is lead, follow or get out of the way: Professor
GILDAN ACTIVEWEAR INC (GIL:CT)
42.12 0.05 (0.12%)As of: 01/09/24 11:08:48 pm
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocksChart Type - 3monthSee Full Stock Page »The board of Gildan Activewear Inc. is digging in for a fight against major shareholders who are pressuring the clothing manufacturer to bring back fired chief executive officer Glenn Chamandy.
Gildan directors publicly attacked Chamandy’s track record and strategies in a letter released Monday, saying they are unanimous in their belief that keeping the longtime executive “would have jeopardized the future of Gildan and destroyed shareholder value.”
The Canadian company, which owns the American Apparel brand, is the subject of an unusual, and increasingly bitter, feud between the board and several large investors over who should run the company. Gildan announced Chamandy’s departure on Dec. 11.
Los Angeles-based investment firm Browning West LP said last month it plans to force a shareholder meeting to elect new directors and install United Rentals Chair Michael Kneeland as chair. The effort to overhaul the board and reinstate Chamandy also has the support of Jarislowsky Fraser Ltd. and Turtle Creek Asset Management Inc.
Those three firms together own about 15 per cent of Gildan’s shares, according to their statements and public filings.
In Monday’s letter, the Gildan board reiterated earlier statements that Chamandy forced a showdown over a proposed multibillion-dollar acquisition strategy. “The board was dubious about these high-risk acquisitions, particularly in light of Mr. Chamandy’s inability to answer even the most basic questions about his strategic proposal,” it said, without naming the proposed acquisition targets.
The board also accused him of being a distracted CEO and said he was rarely in the office, even after the end of COVID shutdowns.
“Mr. Chamandy was chief executive for 20 years, and, in his last few years he gradually became more disengaged as CEO as he increasingly focused on outside personal pursuits including the development of a golf resort in Barbados,” the directors said.
“We would have preferred to keep many of these details private, but the public misinformation tactics by Mr. Chamandy and Browning West demand a public response.”
Chamandy and Browning West did not immediately reply to a request for comment.
Gildan shares were little changed shortly after 10 a.m. Monday. The Montreal-based company’s market capitalization is $7.2 billion down by more than $1 billion since Chamandy was sacked.
The board named a former Fruit of the Loom executive, Vince Tyra, as the next CEO. Browning West and other holders have been scornful of that appointment, questioning Tyra’s track record.
REAL-TIME QUOTE. Prices update every five seconds for TSX-listed stocks
The board of Gildan Activewear Inc. is digging in for a fight against major shareholders who are pressuring the clothing manufacturer to bring back fired chief executive officer Glenn Chamandy.
Gildan directors publicly attacked Chamandy’s track record and strategies in a letter released Monday, saying they are unanimous in their belief that keeping the longtime executive “would have jeopardized the future of Gildan and destroyed shareholder value.”
The Canadian company, which owns the American Apparel brand, is the subject of an unusual, and increasingly bitter, feud between the board and several large investors over who should run the company. Gildan announced Chamandy’s departure on Dec. 11.
Los Angeles-based investment firm Browning West LP said last month it plans to force a shareholder meeting to elect new directors and install United Rentals Chair Michael Kneeland as chair. The effort to overhaul the board and reinstate Chamandy also has the support of Jarislowsky Fraser Ltd. and Turtle Creek Asset Management Inc.
Those three firms together own about 15 per cent of Gildan’s shares, according to their statements and public filings.
In Monday’s letter, the Gildan board reiterated earlier statements that Chamandy forced a showdown over a proposed multibillion-dollar acquisition strategy. “The board was dubious about these high-risk acquisitions, particularly in light of Mr. Chamandy’s inability to answer even the most basic questions about his strategic proposal,” it said, without naming the proposed acquisition targets.
The board also accused him of being a distracted CEO and said he was rarely in the office, even after the end of COVID shutdowns.
“Mr. Chamandy was chief executive for 20 years, and, in his last few years he gradually became more disengaged as CEO as he increasingly focused on outside personal pursuits including the development of a golf resort in Barbados,” the directors said.
“We would have preferred to keep many of these details private, but the public misinformation tactics by Mr. Chamandy and Browning West demand a public response.”
Chamandy and Browning West did not immediately reply to a request for comment.
Gildan shares were little changed shortly after 10 a.m. Monday. The Montreal-based company’s market capitalization is $7.2 billion down by more than $1 billion since Chamandy was sacked.
The board named a former Fruit of the Loom executive, Vince Tyra, as the next CEO. Browning West and other holders have been scornful of that appointment, questioning Tyra’s track record.
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