By Svea Herbst-Bayliss
NEW YORK (Reuters) -Proxy adviser Institutional Shareholder Services (ISS) on Monday recommended that Apartment Investment and Management Company investors elect one of investment firm Land & Buildings’ two director nominees to the real estate investment trust’s 10- member board.
ISS said a newcomer could help iron out governance issues and establish a more robust investor communication program that could improve performance.
“While the company’s share price and operational performance do not signal a crisis, the discount to NAV (net asset value) reflects the company’s untapped potential and constrains its ability to invest in planned projects in a maximally efficient way,” ISS wrote in its recommendation. AIMC shares were flat at $8.27 on Monday afternoon.
James Sullivan, who worked as a real estate investment banker and a senior adviser at commercial real estate-focused firm Green Street Advisors, “appears best suited for the (company’s) board,” ISS wrote, adding that he would bring an independent voice and his experience at Green Street could help improve the company’s investor communications program.
Apartment Investment and Management Co disagreed that stockholders support Sullivan, saying he has “no public company board or executive management experience” and does not provide any expertise that is not currently represented on its board.
ISS also recommended investors vote for incumbent board members Jay Leupp and R. Dary Stone who are standing for re-election.
Land & Buildings, which owns a 5.8% stake in the company and is run by Jonathan Litt, has criticized the company for its trading discount to its stated net asset value.
The ISS report comes after a smaller advisory firm, Glass Lewis, recommended that shareholders re-elect all company directors.
Many investors follow ISS recommendations on votes ranging from who will sit on the board to corporate matters like acquisitions. This vote, scheduled for Dec. 16, will be among the first to use the universal proxy card where investors can select their preferred board candidates instead of the long-used two-card system where investors generally voted for either management or the dissident’s director nominees.
(Reporting by Svea Herbst-Bayliss in New York; Additional reporting by Nivedita Balu; Editing by Matthew Lewis and Subhranshu Sahu)