FSD Pharma Announces That ISS Recommends Shareholders Vote for the Company’s Nominees to the Board Using Only the BLUE Proxy
FSD Pharma Inc. (the “Company”) today announced that Institutional Shareholder Services Inc. (“ISS”), a leading independent international corporate governance analysis and proxy advisory firm, has recommended that shareholders vote FOR all Company Director Nominees (the "Management Director Nominees") in a contested election for the Board of Directors and FOR the elimination of the dual-class share structure (the "Dual-Class Sunset") at the annual and special meeting of shareholders on May 14, 2021 (the "Meeting").
ISS made its recommendation in support of the Management Director Nominees after carefully considering facts and arguments made by the Company and by Anthony Durkacz, Zeeshan Saeed and the other dissident shareholders' (collectively, the "Dissidents"). In recommending that its clients vote FOR the Management Director Nominees, ISS noted the following:
“The dissident has failed to make the case that majority change is immediately necessary at the board level;”
“Moreover, the board's refusal to entertain an acquisition proposed by one of the dissidents in which a material financial interest existed seems to have been a catalyst for the dissident campaign, raising more questions about whether the dissident's issues with the board are part of a personal disagreement or truly a corporate governance structure that has become ineffective;” and
“Finally, the dissident has not provided a detailed and credible plan that seems likely to improve the prospects of the company more than the company's current plan.”
In recommending that its clients vote FOR the Dual-Class Sunset, ISS noted the following:
“Capital structures with unequal voting rights can entrench certain shareholders and management, insulating them from possible takeovers or other external influence or action. The elimination of one of the company's two common share classes will move the company in line with best market practices, being a share structure consisting of only one class of common shares with one vote per share.”
To date, the Dissidents have not indicated how they plan to vote on the Dual-Class Sunset while recommending to the other shareholders of the Company that they abstain from voting on this resolution. Shareholders have a right to know how those soliciting your proxy plan to vote at the meeting. The Dissidents' failure to address this issue is yet another transparent attempt to confuse and mislead shareholders and indicates that they will vote against this resolution in order to maintain their disproportionate voting power over the Company. The Dissidents want to go against management's plan to, as ISS puts in, "move the company in line with best market practices".