ANNUAL GENERAL MEETING
Shareholders challenge Trencor board over lagging Textainer
After a tense and at times acrimonious annual general meeting at which minority shareholders challenged Trencor’s directors to demonstrate they could reverse the long-term underperformance of its major asset Textainer, shareholders voted in overwhelming support of most of the resolutions.
Trencor’s 48% stake in New York-listed and Bermuda-registered shipping container group Textainer is its primary asset.
Trencor’s remuneration policy, which has been criticised for being too generous for a board that oversees no operational assets, was opposed by 36% of the shareholders.
The remuneration implementation report was opposed by 20% of shareholders.
Chair David Nurek, whose re-election was opposed by 16% of shareholders, told the two-hour-long meeting that he "completely rejected the allegation" that the management at Textainer was inactive.
Textainer had achieved a "noteworthy improvement" during financial 2017 and it was evident in the first six months of 2018 that this was continuing, Nurek said.
If the 2017 improvement continued, Trencor would consider resuming dividend payments, he said.
"We sincerely hope the improved performance of 2017 will continue, but we’re not making any promises."
'Low return on equity'
Chris Logan, CEO of Opportune Investment, challenged Nurek’s upbeat description of the 2017 performance, pointing out that Textainer had achieved a return on equity of only 1.7% that year.
Shareholder Nick Krige added that investors had been so disappointed by the recent results for the period to end-June they knocked the share price down 9%.
Nurek also addressed the controversial issue of the anti-takeover provisions in Textainer’s bylaws. "These anti-takeover provisions are very common in companies registered in Bermuda and [the state of] Delaware [in the US]."
They were frequently used by high-growth companies and their existence had been fully disclosed to shareholders, Nurek said.
Triton, which was the largest shipping container group in the world and generated a 16% return on equity, had similar provisions, he said.
Logan commented that anti-takeover provisions became a critical issue when a company underperformed over the long term as they prevented other more profitable operators from acquiring the business and improving its performance.