The CEO and board of directors at Gildan Activewear Inc. have resigned ahead of the company's annual meeting on Tuesday, paving the way for the company's co-founder to return as chief executive.
Several major Gildan shareholders have been attempting to have the clothing maker's former CEO Glenn Chamandy reinstated since his ouster last year to make way for Vince Tyra.
At the time, the company said it made the swap because Chamandy had no credible long-term strategy for the company and had lost the board's trust and confidence.
Gildan confirmed Thursday evening that Tyra stepped down, and that before resigning, the board appointed a slate of directors proposed by shareholder Browning West in its stead.
The company's shareholders "have made their views clear," Gildan said in a release.
The battle for control of Gildan has played out publicly, with each side making accusations about whether Chamandy or Tyra was fit to run the company.
The fight turned ugly at times, with the two sides trading lawsuits, and Gildan accusing the ex-CEO of neglecting his duties at the top job.
Activist shareholder Browning West, with the support of other shareholders, has been campaigning for Chamandy's return and proposed a new slate of board directors for election at the company's annual meeting next week.
The departure of the board and Tyra ahead of the meeting is an apparent concession that a majority of shareholders favoured Browning West's slate — and Chamandy — instead.
Preliminary results before the board's resignation indicated that an overwhelming majority of votes cast supported Browning West's slate, the shareholder said in a release.
"The outgoing directors believe that it was in the best interests of all Gildan stakeholders for them to resign and not stand for election at the upcoming Annual Meeting, allowing the new Board to be seated so that it can oversee the Company in the most orderly and efficient manner," Gildan said in its release.
"The outgoing directors wish the new directors, the management team, Gildan’s 45,000 employees, and its shareholders success in the future."
The outgoing board also says it ended previously announced discussions about a potential sale of the company.
"We are deeply grateful for the outpouring of support that Browning West’s slate and plan have received from our fellow shareholders, Gildan employees, and leading proxy advisory firms," said Usman Nabi and Peter Lee of Browning West in the release.
Earlier this month, prominent advisory service Institutional Shareholder Services Inc. threw its support behind the slate, recommending shareholders vote for Browning West's picks.
Browning West says this is the first time in more than a decade that an overwhelming majority of shareholders and all the leading proxy firms -- ISS, alongside Glass Lewis and Egan Jones -- supported a full reconstitution of a company's board.
"Our directors are eager to begin working toward their common goal of delivering enhanced shareholder value, which begins with reinstating Glenn Chamandy as CEO," said Nabi and Lee.
In April, Gildan replaced five board directors and said it would back two Browning West nominees.
This report by The Canadian Press was first published May 23, 2024.
Companies in this story: (TSX:GIL)
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