WASHINGTON — An investment group that holds approximately 3 million shares of Rite Aid stock is calling for an overhaul of the retail pharmacy chain’s board ahead of its annual stockholders meeting next Thursday.
In a letter to Rite Aid’s board of directors, the CtW Investment Group, which works with pension funds sponsored by unions affiliated with the nonprofit group Change to Win, said its analysis found that only 4-of-the-11 nominees named in Rite Aid’s May 13th proxy statement were sufficiently independent to represent public shareholders.
Responding to the letter, Rite Aid SVP corporate communications Karen Rugen told Drug Store News that 8-of-the-11 nominees “fully satisfy” the New York Stock Exchange’s director independence requirements.
“We have a well-qualified board with a broad and diverse range of business experience,” Rugen said.
There currently are 10 nominees for director up for election to the board, while Leonard Green & Partners announced last month that it plans to elect John Baumer to replace its member on the board, Jon Sokoloff, who has resigned. Leonard Green & Partners, an affiliate of Green Equity Investors III, has the right to elect a board member under an agreement it made with Rite Aid when it purchased stock in the company in October 1999.
In the letter, CtW Investment Group executive director William Patterson wrote, “Our company’s lackluster performance over the past decade and the daunting circumstances in which it presently finds itself are inextricably tied to a lack of needed oversight by truly independent directors, and warranted far greater treatment in the proxy statement mailed to shareholders on May 13th.”