Proxy Advisors Back Napster Management

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Digital music company Napster Inc. said Monday that two independent proxy advisors are saying three dissident investors who seek board seats are unqualified to be elected.

Proxy Governance and Glass Lewis & Co. said the dissidents don’t have the appropriate background or experience to help the board address the company’s challenges, said Los Angeles-based Napster in a news release.

The company’s problems in adding and retaining customers prompted Perry Rod, Thomas Sailors and Kavan Singh to prepare their own independent proxy.

Napster’s current board and management are pushing stockholders to reelect three incumbent independent nominees at its Sept. 18 annual meeting.

Proxy Governance said that “we find no evidence that the dissident nominees are better equipped than the incumbent board to address the company’s myriad challenges,” according to Napster.

Glass Lewis, while recommending that stockholders vote against the dissidents, did support their proposals related to governance issues, including getting rid of the company’s current “poison pill” policy that discourages takeover attempts.

In addition, Proxy Governance made a “withhold” recommendation for the reelection of director Robert Rodin, head of the board’s compensation committee, as a way of expressing concern about executive compensation, Napster admitted.

Napster shares were down 1 cent, less than 1 percent, to $1.33 in morning trading on the Nasdaq.

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