US-listed bulker owner Genco Shipping & Trading has hit back in its ongoing boardroom battle with Greek magnate George Economou saying his nominee to the Genco board has a history of declining shareholder value and underperformance.
Economou, who, via his affiliated investment vehicles, holds about a 5.4% ownership stake in Genco, filed a proxy to nominate Robert Pons to the board and called for the removal of Genco chairman James Dolphin, who has been on the board for 10 years.
Pons is president and chief executive at telecom and technology management consultancy Spartan Advisors and has also served on the boards of directors of about 16 publicly traded companies.
Genco has already urged shareholders in a definitive proxy filing to dismiss the Greek’s proposal and his nominee to the board.
Previously, the bulker owner said that Economou was pursuing an agenda based on a share repurchase plan and a premium self-tender offer that would double Genco’s net leverage and limit a company’s ability to pay future dividends.
Genco has also claimed Economou had “destroyed” other shareholders’ value in DryShips and that his TMS Tankers was shipping Russian crude and that it landed on the Ukrainian government’s list of “international sponsors of war”.
Genco yesterday warned shareholders of Pons and his dealings in firms in which he was a member of the board. Genco pointed out that Pons has served as a director mainly at micro or nano cap companies, none of which are involved in shipping, commodities, cyclical businesses or other industries relevant to Genco’s business and that most companies on whose boards he served declined in value or underperformed the S&P 500 during his tenure.
Genco showed that a total shareholder return (TSR) against the S&P 500 was -39.6% for companies with Pons on the board. Also, of the 13 companies shown by Genco, only one had a positive S&P 500 over/under, while all others were in the red.
The bulker owner said that Genco, in contrast to Economou and Pons, paid 18 consecutive quarterly dividends, reduced its debt by 55% since 2021, and invested $520m in fleet expansion and modernisation since 2018.
Economou has described Genco’s actions as “hostile and evasive” and claimed that its chairman, Dolphin, is seeking to empire-build and that his board “knows better than company shareholders how they should spend their own money”.
“Dolphin has fostered a board culture that is dismissive of shareholder points of view and that he seeks to have a board comprised of persons pliant to his will as opposed to persons who will engage in the robust debate a good board needs to ensure that it makes good decisions,” Economou said in a proxy filing last month.
Economou previously instigated boardroom battles after buy-ins in Palios family-linked tanker owner Performance Shipping and dry bulk player OceanPal. Genco holders will have their say at the annual meeting scheduled for May 23.
Genco again recommended that the shareholders vote for the re-election of each of the company’s seven nominees currently serving on the board and against Economou’s nominee by voting either withhold or against Economou’s proposal.
