ISS Supports Election of Mark H. Ravich to Rockwell Medical, Inc. Board
22 May 2017 - 10:00PM
Business Wire
Leading Independent Proxy Advisory Firm
Endorses Case for Change at Rockwell
ISS Tells Investors that Highly-Qualified
Nominee Mark H. Ravich is the Right Choice for the Board
Richmond Brothers, Inc., a Michigan-based SEC registered
investment advisor and wealth management firm that is the largest
beneficial owner of Rockwell Medical, Inc. (NASDAQ:RMTI)
(“Rockwell” or the “Company”), and Mark H. Ravich, who together
with their affiliates beneficially own over 6.1 million shares, or
11.8% of the Company’s outstanding common stock, today announced
that Institutional Shareholder Services Inc. (“ISS”), a leading
independent proxy voting advisory firm, has recommended that
shareholders of Rockwell vote on the BLUE proxy card to elect highly-qualified
nominee Mark H. Ravich to the Board.
ISS also supported the Richmond Brothers and Ravich
recommendations on the three other proposals they made
recommendations on, recommending AGAINST the advisory vote to
ratify named executive officers’ compensation, supporting the ONE
YEAR frequency for an advisory vote on say on pay, and
AGAINST approving the Company’s long term incentive plan. To follow
the ISS recommendations, Rockwell shareholders should NOT vote on
the Company’s white proxy card.
In reaching its conclusion, ISS acknowledged the history of
underperformance and strategic missteps at Rockwell, and the
failure to monetize the Company’s promising drugs Triferic and
Calcitriol. ISS performed a detailed analysis of both sides’
positions and carefully considered, among other things, the
Company’s total shareholder return, operating performance and
financial performance, as well as the strong experience and
qualifications of nominee Mark H. Ravich.
ISS concluded that shareholders should vote on the BLUE proxy card, saying:
“Given Rockwell's prolonged underperformance,
ineffective communication with its shareholders, and persistent
governance and compensation issues, additional shareholder
oversight on the board appears to be a more urgent need than added
industry sector expertise. Dissident nominee Ravich brings a
strong, direct financial interest in improving shareholder value.
Therefore, votes FOR dissident nominee Ravich on the BLUE card are
warranted.”1
Commenting on the Company’s stock performance and what Richmond
Brothers and Ravich believe is Rockwell’s attempted cherry picking
of a peer group, ISS notes:
- “Rockwell's stock has produced negative
absolute returns for shareholders over the past one, three, and
five years, severely underperforming a comparable benchmark and a
median of similarly-sized peers.”
- “The company's May 9 presentation
compared its TSR with that of the LifeSci Specialty Pharma Index,
created by LifeSci Index Partners…LifeSci Advisors' web site lists
Rockwell as a client…Given the conflicts facing LifeSci Index
Partners, the objectivity of this index appears questionable.”
- “For the one year ending Feb. 17, 2017,
Rockwell's TSR was (24.1) percent, compared with 8.1 percent for
the peer median and 8.9 percent for the Russell 2000 Pharmaceutical
Index. For the five years ending Feb. 17, 2017, Rockwell's TSR was
(38.6) percent, compared with 47.9 percent for the peer median and
143.1 percent for the Russell 2000 Pharmaceutical Index.”
Regarding the Company’s handling of the process to bring its
products to market, ISS states:
- “[M]anagement’s execution and its
communication with investors on Triferic and Calcitriol have been
subpar.”
- “The company has been asking
shareholders to forego revenues during part of this [Triferic]
patent period, in the hopes that a higher price during a shorter
time period will be worth more. With no visibility on timing, no
evidence of real progress, and a muddled picture on the price
differential, waiting for a higher reimbursement rate seems
increasingly hard to justify."
- “The company now expects to launch
Calcitriol in October 2017, using a third manufacturer. Even if
management's projections are accurate this time, shareholders will
have lost three years of potential revenue from this drug.”
ISS also expressed concerns around Rockwell’s corporate
governance, saying:
- “In each year 2013-16, ISS ranked the
company's governance a 10 on a 1-10 scale, with 10 being the
highest risk, or worst possible score.”
ISS also addresses Rockwell’s long history of excessive
executive compensation and recommended shareholders vote AGAINST
the Company’s proposed long-term stock incentive plan. ISS
notes:
- “In each of those years [2013-16], ISS
advised shareholders to vote against the stock compensation plan
proposed by management due to the plans' high costs and lack of
objective criteria. In addition, during uncontested director
elections in 2013, 2014, and 2016, ISS recommended that
shareholders withhold votes from incumbent directors running for
re-election, due in part to misalignments between executive
compensation and company performance.”
- “Despite shareholders repeatedly
exhibiting such displeasure [with the executive compensation plan],
through 2016 the company continued to nominate its longstanding
directors. Perhaps more concerning, each year it asked permission
to issue ever more shares as equity compensation: 1.5 million in
2013, 1.75 million in 2014, 2 million in 2015 and finally, 7.5
million in 2016.”
- “Shareholder rejection of the stock
plan last year did not dissuade the board from initially requesting
in 2017 that an 'evergreen' amount of shares be approved for
executive compensation. (I)n the definitive proxy filed on April
21, the company eliminated the 'evergreen' provision of the
proposal. One conclusion could be that the sunlight shined by the
dissident on this proposal inspired this modification.”
David S. Richmond, Chairman of Richmond Brothers, Inc., and Mark
H. Ravich said, “This recommendation from ISS is a powerful
endorsement of our strong belief that change is desperately needed
at Rockwell, and that Mark is the right nominee for the Board. ISS
rightfully critiqued Rockwell for its failure to execute on
strategic initiatives and deliver value for shareholders, and made
clear that Rockwell’s nominee, David Domzalski, is not the right
choice to represent shareholders’ best interests. We look forward
to continuing to make our case for change in advance of the
Company’s annual meeting.”
For more information, and to see other communications and
filings from Richmond Brothers and Mark H. Ravich, visit this link:
http://www.richmondbrothers.com/time-for-action-at-rmti.
Voting withhold on Rockwell’s nominee on the
white proxy card is not the same as voting for Mark H. Ravich on
the BLUE proxy card. If you have voted a white proxy card, you
have every right to change your vote by voting a later dated
BLUE proxy card today. You may vote by internet or telephone
by following the instructions on the form you have been
provided.
FOLLOW ISS’ RECOMMENDATION AND VOTE THE
BLUE PROXY CARD TO ELECT MARK H.
RAVICH TODAY
If you have any questions, or require
assistance with your vote, please contact Saratoga Proxy Consulting
LLC, toll- free at (888) 368-0379, call direct at (212) 257-1311 or
email: info@saratogaproxy.com
About Richmond Brothers, Inc.
Richmond Brothers, Inc. is an SEC registered investment advisor
and wealth management firm founded in 1994.
About Mark H. Ravich
Mark H. Ravich is a private investor and currently serves as
President of Tri-Star Management, Inc., a commercial real estate
management and syndication company that he co-founded in 1998.
1 Permission to quote from the ISS report was neither sought nor
obtained.
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version on businesswire.com: http://www.businesswire.com/news/home/20170522005625/en/
ShareholdersSaratoga Proxy Consulting LLCJohn Ferguson /
Joe Mills, 212-257-1311info@saratogaproxy.comorMediaSloane
& CompanyJoe Germani / Jaimee Pavia,
212-486-9500jgermani@sloanepr.com / jpavia@sloanepr.com
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