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Glass Lewis even recommends against board motions to which Benny Landa has not objected.
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A day after ISS recommended investors to support Teva Pharmaceutical Industries Ltd.’s (NYSE: TEVA; TASE: TEVA) motions at its forthcoming shareholders meeting, a second consultancy, Glass Lewis, has published very different recommendations. Glass Lewis, which has among its clients institutional shareholders in Teva, supports the position of activist investor Benny Landa and opposes some of Teva’s motions. Glass Lewis even recommends opposing some motions to which Landa has expressed no objection.
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Teva’s annual general meeting will take place in two weeks’ time. Shareholders will be asked to re-elect some of the directors and external directors. Landa, together with Ruth Cheshin, a Teva shareholder and a member of the company’s founding family, have expressed opposition to the re-election of Ory Slonim, on the grounds that they wish to see more board members with experience in the global pharmaceuticals industry. Glass Lewis supports Landa’s position, recommending voting against the re-election of Slonim and in favor of Dan Propper.
Glass Lewis also recommends voting against the re-election of Joseph Nitzani (to whom Landa has not objected). According to Glass Lewis, Slonim and Nitzani, as members of Teva’s governance committee, have not provided satisfactory answers to concerns raised by the shareholders. The firm therefore recommends voting against Nitzani and Slonim, and in favor of Jean-Michel Halfon (a new candidate for the board), and Propper.
Glass Lewis also supports Landa’s objection to the proposal to buy liability insurance for directors and officers of up to $600 million annually. Glass Lewis believes that the scope of the insurance, which includes violations of securities law, is not in the shareholders’ best interests. Glass Lewis also recommends against the annual $3.5 million equity component of CEO Erez Vigodman’s compensation, saying that there is insufficient connection between this component and the company’s performance.
Shareholdings in Teva are distributed among many institutions. It is believed that most of the US institutions that hold shares in Teva receive recommendations from ISS, and only a minority works with Glass Lewis. Nevertheless, there is no doubt that Landa’s arguments receive a boost from Glass Lewis’s recommendations.
The Teva board said in response, “The board of directors of Teva reiterates its complete faith in the election of Joseph Nitzani and Ory Slonim. These are two business leaders with broad and deep experience who have made a proven contribution to Teva’s achievements. Nitzani brings with him experience and know-how in finance and accounting and has headed large and important entities in Israel. Slonim is considered one of Israel’s leading experts in risk management, and brings with him know-how and exceptional experience in managing complex and sensitive processes.”
Published by Globes [online], Israel business news – www.globes-online.com
