The proxy advisory firm Institutional Shareholders Services recommended this morning that shareholders back the three candidates nominated for the Barnes & Noble board by Ron Burkle, B&N’s largest outside shareholder involved in a proxy battle with the country’s largest bookstore chain. Last week a smaller advisory firm, Glass Lewis, backed the B&N slate led by chairman Len Riggio.
In backing Burkle, ISS agreed with his argument that the B&N board is too closely tied to Riggio and his family and questioned a number of moves, including the acquisition of B&N College Booksellers from Riggio by B&N. The steep decline in B&N’s stock price, made worse by a recent downgrade from Bank of America Merrill Lynch that questioned the retailer’s digital strategy, were also cited as reasons for supporting the alternative Burkle slate. “Based on [B&N’s] deteriorating operating performance, poor shareholder return, less-than-enthusiastic analyst recommendations, inadequate transparency into and disclosure on a very large related-party transaction which appears to have exacerbated performance problems, and significant concerns about unusual pay practices, we believe the dissidents have demonstrated a compelling case that change in the {B&N] board is warranted.,” ISS wrote.
The vote for the nominees is set to culminate September 28 at the B&N annual meeting.
