At an unusually exciting set of annual meetings, shareholders of Ashford Hospitality Trust [NYSE: AHT] and Ashford Hospitality Prime [NYSE: AHP] voted by more than 75% to reject the company’s proposal to restrict shareholder nominations and proposals to those from large holders only, in a vote which was watched by corporate governance advocates and company boards alike.
The overwhelming majority of shares voted on UNITE HERE’s proposals at AHT supported them. The shareholder proposals sought to restore shareholder rights stripped ahead of Ashford Inc.’s [NYSE MKT: AINC] spin-off, secure other important governance measures, and recommend changes to related party contracts to benefit AHT shareholders. 38,823,451 shares voted on UNITE HERE’s ballot, approximately 49% of all AHT shares voted at the meeting.
Votes submitted on UNITE HERE’s proxy were necessary to establish a quorum at the meeting. Votes for UNITE HERE’s shareholder proposals, which were properly noticed to the company on December 10, 2014 and January 12, 2015, were submitted to the company as follows:
| FOR | AGAINST | ABSTAIN | % of | % of | ||||||||||||||||
| Proposal 6 (protect right to amend bylaws) | 38,693,253 | 900,209 | 22,000 | 48.5% | 97.7% | |||||||||||||||
Proposal 7 (25% to call special meeting) | 38,693,083 | 900,209 | 22,000 | 48.5% | 97.7% | |||||||||||||||
Proposal 8 (protect right to annual director elections) | 38,693,083 | 900,209 | 22,000 | 48.5% | 97.7% | |||||||||||||||
| Proposal 9 (shareholder right to approve poison pill) | 37,456,966 | 1,357,326 | 22,000 | 46.9% | 96.5% | |||||||||||||||
| Proposal 10 (proportional exec ownership in Inc/AHT) | 24,305,233 | 10,055,790 | 4,475,268 | 30.5% | 62.6% | |||||||||||||||
| Proposal 11 (Amend advisory agreement) | 24,507,508 | 14,306,783 | 22,000 | 30.7% | 63.1% | |||||||||||||||
| Proposal 12 (Permit open bidding for hotel mgmt. contracts) | 24,488,208 | 9,853,515 | 4,494,568 | 30.7% | 63.1% | |||||||||||||||
“We urge Ashford to take seriously the substantial showing of shareholders who wish to improve corporate governance at Trust in the face of growing related party transactions,” said JJ Fueser, UNITE HERE research coordinator.
Shareholders narrowly approved the advisory say-on-pay vote at AHT with just 54% of votes cast, and also approved a charter amendment to establish a majority voting requirement for director elections.
At AHP, shareholders approved the charter amendment necessary to opt out of Maryland’s Unsolicited Takeover Act, completing the process of opting out of MUTA and requiring shareholder approval to opt back in.
Additionally, it appears that AHT’s Board chose to vote its 30% stake in Ashford Inc. for a 3-year extension of Ashford Inc.’s poison pill. UNITE HERE believes the extension of the pill is adverse to the interests of AHT’s shareholders to maximize the value of its holdings in Ashford Inc., while benefiting insiders at both companies.
Similarly, AHT’s Board appears to have voted its Ashford Inc. shares for the company’s proposal to restrict shareholder nominations and proposals to large holders only, even though AHT shareholders overwhelmingly rejected that proposal the day before.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150521006219/en/
Contacts:
JJ Fueser, Research Coordinator
416-893-8570
