Alberta Investment Management Corp. has taken the unusual step of publicly chastising Viterra Inc., saying that the grain handler's board is standing in the way of the company's long-term success.
The move is the latest sign that Canada's pension plans are increasingly comfortable taking activist roles. The Ontario Teachers' Pension Plan recently teamed up with a New York-based hedge fund to push for a radical overhaul at the McGraw-Hill Companies, but public pressure tactics remain relatively rare in Canada.
AIMCo has been Viterra's biggest shareholder since 2009, and now holds more than 17 per cent of the company's shares, but it's not happy with the firm's performance. AIMCo issued a press release Tuesday saying that it believes that Viterra's current board does not have the necessary skills or experience to meet the company's leadership needs as a growing international agribusiness.
AIMCo says it has been telling the company and its board this for 18 months and it hasn't been happy with the response.
Several weeks ago, the Alberta fund manager told Viterra that it would requisition a shareholder meeting if the company did not take action.
On Oct. 28, Viterra announced that it will hold its next annual meeting on March 8, 2012, and that directors Vic Bruce and Paul Daniel will not be standing for re-election. The company hired search firms to find replacements.
That move did absolutely nothing to placate AIMCo. "This release introduces yet more processes that, in AIMCo's view, will delay substantive change and continue to deny shareholders any meaningful input," the pension fund said in its press release. "AIMCo believes that Viterra and its board need a strong message from shareholders that further platitudes about seeking shareholder input and closed door processes are not satisfactory."
AIMCo says it should have a say in who the company's directors are. Viterra couldn't immediately be reached for comment Tuesday.
AIMCo's decision to backstop half of a $450-million subscription rights financing from the grain handler in 2009 was among the first in a series of high-profile investments the pension fund has made in its relatively short life as a crown corporation. (The Alberta government launched AIMCo in 2008).