US-listed bulker owner Genco Shipping & Trading has urged shareholders in a definitive proxy filing to dismiss Greek shipping magnate George Economou’s proposal and his nominee to the company’s board.
Economou, who, via his affiliated investment vehicles, holds about a 5.4% ownership stake in Genco, filed a proxy last week to nominate Robert Pons to the board and called for the removal of Genco chairman James Dolphin, who has been on the board for 10 years.
The move followed Genco’s unanimous rejection of two of Economou’s board nominees earlier this year, including Pons, saying that they were not additive to the board’s existing skills and expertise or lacked sufficient experience in shipping and related industries. Pons is president and chief executive at telecom and technology management consultancy Spartan Advisors and has also served on the boards of directors of about 16 publicly traded companies.
Economou described Genco’s actions as “hostile and evasive” and claimed that Dolphin is seeking to empire-build and that his board “knows better than company shareholders how they should spend their own money”.
“Dolphin has fostered a board culture that is dismissive of shareholder points of view and that he seeks to have a board comprised of persons pliant to his will as opposed to persons who will engage in the robust debate a good board needs in order to ensure that it makes good decisions,” Economou said in a proxy filing last week.
The owner of more than 40 ships on Tuesday came out strongly against Economou’s “self-serving” proposal and highlighted his previous actions in other companies.
Economou “is known throughout the industry and investment community for his history of poor governance practices and brings with him a distinct track record of self-dealing and shareholder value destruction,” Genco wrote in a letter to shareholders, adding: “At Genco, he is pursuing an agenda based on a share repurchase plan and a premium self-tender offer that would double our net leverage and limit our ability to pay future dividends.”
The company pointed to Economou’s actions at his last listed firm, DryShips, claiming he destroyed other shareholders’ value in the company before taking it private, and also to his TMS Tankers for shipping Russian crude and landing on the Ukrainian government’s list of “international sponsors of war”.
Genco went further by setting up a “VoteForGenco” website where it cautions shareholders against Economou’s history of “capital allocation mixed with conflicts of interest, self-dealing and shareholder value destruction for personal gain”.
Economou previously instigated boardroom battles after buy-ins in Palios family-linked tanker owner Performance Shipping and dry bulk player OceanPal. Genco holders will have their say at the annual meeting scheduled for May 23.
