LAVAL, Quebec --Alimentation Couche-Tard shareholders will vote Tuesday on a proposal to extend the tenure of the founding directors of the company, possibly forcing turnover of company leadership sooner than those founders would like.
In July, the company asked its shareholders to approve amendments that would maintain its dual-class structure longer, so that its four founders can remain involved in guiding the chain for years to come, as previously reported in CSP Daily News.
Together, co-founders and directors of the board Alain Bouchard (executive chairman of the board), Jacques D’Amours (former vice president of administration), Richard Fortin (former CFO) and Réal Plourde (former COO) currently own about 22.7% of the issued and outstanding shares of Couche-Tard, according to the SEC documents. Most of these shares are multiple-voting shares with 10 votes each, but they are subject to a sunset provision that would remove their superior voting status when:
- the youngest of the founders turns 65 years old or passes away, whichever happens first; or
- the day when the founders hold, directly or indirectly, collectively less than 50% of the voting rights attached to all outstanding voting shares of Couche-Tard.
D’Amours is the youngest at age 58, followed by Plourde (65) and Bouchard and Fortin, who are both 66 years old. Bouchard retired as president and CEO of Couche-Tard in September 2014, replaced by Brian Hannasch.
Now Couche-Tard is asking shareholders during its Sept. 22 annual meeting to vote on amendments that would extend the dual-class structure.
The founders had initially suggested their multiple-voting shares retain their power as long as they or their families held at least 50% of the company’s voting rights, according to a report in The Globe & Mail.
That proposal, however, was modified three times before it reached shareholders. The next suggestion was that the dual-class voting structure end when the last of the founders died. Then, it changed so at least one founder needed to be “actively involved” in the business for the special voting rights to continue, according to the report. “Actively involved” meant at least one founder needed to be on the board of directors.
The decision is now in shareholders’ hands, and it could be a struggle to gain the extension, according to the newspaper report.
"Expect the vote to be close, as the proposal on Tuesday’s ballot needs two-thirds support from ordinary shareholders to pass," the newspaper reported. "Last year, a stockholder proposal to change Couche-Tard’s director election methods garnered the support of 68% of the subordinate shareholders, despite being opposed by the founders. Clearly, Couche-Tard investors can appreciate the gains of the stock, but they may require a little more satisfaction from the company’s governance structure."
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