THG set for battle with shareholders over return of non-executive director
E-commerce platform THG could face a shareholder rebellion at its upcoming annual general meeting this month over concerns surrounding the return of a non-executive director.
Two separate shareholder advisory groups, Institutional Shareholder Services (ISS) and Glass Lewis, are said to have asked investors to vote against the re-election of Ian McDonald at the firm’s AGM on June 21, the Financial Times reported.
McDonald, who is also a non-executive director at Boohoo.com, currently sits on THG’s remuneration, nomination and sustainability committees.
ISS and Glass Lewis are reportedly concerned about McDonald, who joined the THG board in 2010, due to his position as founder of Belerion Capital, which last year helped manager King Street Capital on an unsuccessful takeover bid for THG.
Moreover, ISS has criticised McDonald’s role as a non-executive director stating that he could “not be considered” independent as he has been on the board together with two of THG’s founders for some 13 years.
A Glass Lewis report, seen by the outlet, also describes McDonald as an “affiliate or insider” on the pay committee.
However, in its annual report, THG defended McDonald’s position, arguing it would “not be in the best interests of the company and its shareholders for Iain McDonald to step down”.
In response to concerns about McDonald, THG told City A.M.: “Charles Allen [non-exectuive chair of THG] joined the board as independent non-executive chair in March 2022 with a clear mandate to improve governance, transparency and to strengthen and refresh the board by improving its independence and diversity.
“Since then, the board has appointed three new independent [non-executive directors] in Gillian Kent, Dean Moore and Sue Farr, as senior independent non-executive, and with a commitment for further appointments in line with good corporate governance and as a matter of priority during 2023,” The company said in an emailed statement.
City A.M. has contacted Glass Lewis and ISS for a comment.
News of a looming stand-off with shareholders comes amid a challenging period for the brand, which in April posted an operating loss of £495.6m as its costs are jacked up by soaring international delivery costs.
The group, which sells third party beauty and luxury items, also batted away a takeover bid from US private equity giant Apollo.