Two leading proxy advisory firms have taken opposing positions in a battle between First Foundation in Dallas and an activist investor.
Glass Lewis issued a report encouraging shareholders to vote for Allison Ball, who was nominated by Driver Capital Management to stand for election to the $13.6 billion-asset First Foundation’s board. Ball is a partner at Hanover Technology Investment Management.
Ball’s technology background could benefit First Foundation “given the evolution and increasing relevance of technology in the banking sector, not to mention the general absence of technology expertise among the company’s current directors,” Glass Lewis said in its report.
Glass Lewis has a critical view of the banking company’s financials. “We found the company’s total-shareholder-return performance was worse than the performance observed in 29 of the 30 unique banking peers that were included in the Glass Lewis Peer Group,” the report said.
Institutional Shareholder Services (ISS) disagreed, stating in its report that the First Foundation “delivered strong top-line and earnings growth over the last five years, mirrored by steady growth in assets, deposits, and loans, while maintaining a strong credit profile.”
ISS urged shareholders to support all of First Foundation’s nominees and reject Ball. ISS noted the Ball, a partner at Hanover Technology Investment Management, has no commercial banking or corporate board experience.
“This does not appear to be the opportune time for [Ball] to learn the ropes of serving as a public company director,” the advisory firm wrote.
First Foundation was quick to promote the ISS findings.
“ISS recognizes that First Foundation has the right board and the right strategy to continue enhancing value for stockholders,” CEO Scott Kavanaugh said in a press release.
“This unbiased third-party recommendation reaffirms the board’s conclusion that Driver did not make a compelling case for change and their nominee does not have the experience or expertise to be additive to the First Foundation board,” he added.
Abbott Cooper, managing member at Driver, touted the Glass Lewis report.
“Driver is pleased that Glass Lewis is acknowledging First Foundation’s abysmal underperformance and recommending the company’s stockholders vote for desperately needed boardroom change,” Cooper said in a separate release.
“We agree with Glass Lewis’ critique of the company’s concerning governance practices and attempt to entrench itself, and we could not be more excited about the prospect of the fresh perspective, strong expertise and fiduciary mindset that our independent nominee … would bring to the board,” Cooper added.