Ellies sticks to guns over CEO despite shareholders’ vote
Prithivirajh took over as CEO in August after spending two years as group CEO of GloCell
Electrical products company Ellies has no plans to axe its new CEO, Shaun Prithivirajh, despite shareholders voting against his appointment last week.
On Friday, 52.8% of votes cast at Ellies’s annual general meeting were against Prithivirajh’s appointment. He took over as CEO in August after spending two years as group CEO of GloCell.
Despite the resolution not being passed,the company says that Prithivirajh “remains in the company’s employ as its CEO in accordance with his contract of employment. This is disputed by certain of the shareholders.”
Investors also voted against the re-election of Fikile Mkhize as a director of the company and a member of the audit and risk committee. Mkhize was appointed to the board in June 2012 as an independent non-executive director.
Ellies said it adjourned the annual general meeting to reconsider Mkhize’s re-election as a director, but “the validity of the adjourned meeting is presently in dispute by certain of the shareholders”.
In July, the company reported its first annual profit in four years. Revenue for the year to April rose 8% to R1.4bn, while the group recorded a total comprehensive profit for the year of R38m, from a loss of R249.9m the year before.
Ellies is not the only company contending with shareholder activism in 2018, a generally torrid year for JSE-listed stocks.
Earlier in December, Spur Corporation’s shareholders shot down the group’s pay policy for the second year in a row. As many as 74.9% of votes cast at Spur’s annual general meeting were in opposition to the group’s remuneration policy. That is an increase from 51% of the vote in 2017.
“This is a sign of the times — if you don’t perform then you are going to feel the weight of shareholder activism,” investment analyst Chris Gilmour said last week, citing heavy opposition to Absa’s remuneration policy earlier in 2018.