Shareholders decline Coast Capital’s proposals, but Wolfhart Hauser leaves the group following ‘a very clear shot across the bows of the board’

 
Wolfhart Hauser

 

FirstGroup avoided an overhaul of its current board of directors after shareholders this week voted against proposals put forward by activist investor Coast Capital.

All of the resolutions put before an extraordinary general meeting in London on June 25 were defeated. On average, shareholders voted more than four to one against Coast’s resolutions.

Despite this defeat, chairman Wolfhart Hauser will step down from his role after the annual meeting on July 25. Around 29% of FirstGroup shareholders voted to remove the German businessman, who has served as chairman since July 2016.

Having renewed the board through the appointment of independent directors… and overseen the appointment of Matthew Gregory as chief executive and Ryan Mangold as chief financial officer to drive delivery of the strategy, it is now time for me to move on

Commenting on his departure, Hauser said: “Having renewed the board through the appointment of independent directors… and overseen the appointment of Matthew Gregory as chief executive and Ryan Mangold as chief financial officer to drive delivery of the strategy, it is now time for me to move on.”

Senior independent director David Robbie will become interim chairman as the board seeks a permanent replacement.

FirstGroup acknowledged that more than 20% of shareholders voted in favour of several resolutions against the advice of its board, but the group is keeping faith with the strategy it announced on May 30. This plan will see the group exit the UK bus business, sell its Greyhound coach operation in North America and focus on its “core” contracted bus businesses in North America.

Coast Capital failed to get any of its favoured directors appointed to the board. Former transport minister Steve Norris came closest, with 36% voting in favour of his appointment.

Shareholders did not vote on the appointment of David Martin, the former chief executive of Arriva. Coast Capital had proposed his appointment but FirstGroup did not receive confirmation from Martin of his willingness to be appointed.

Gerald Khoo, a transport analyst at Liberum, said that the vote was not as close as he had anticipated – but the rebellion was too big to ignore.

There has been a very clear shot across the bows of the board

“There has been a very clear shot across the bows of the board,” he said. “It will be under clear pressure to deliver tangible progress on the strategy, to crystallise value and to shrink the number of challenges faced by the group. The plan to sell Greyhound and separate UK Bus is far from straightforward, and management must now execute without a permanent chairman for the foreseeable future and while dealing with potential further attacks from Coast Capital.

 
This article appears in the latest issue of Passenger Transport.

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