CALGARY — A prominent shareholder advisory firm says a dissident investor has not cleared the bar to justify taking control of Parkland Corp.'s board of directors, but there is a case for change.
Institutional Shareholder Services recommends shareholders vote for six director nominees put forward by activist investor Simpson Oil and seven of Parkland management's candidates.
Parkland and Cayman Islands-based Simpson have been at odds over the Calgary-based fuel refiner and retailer's performance and governance for about a year.
Simpson owns just under 20 per cent of Parkland's shares and wants nine of its directors added to Parkland's board at its May 6 shareholder meeting in Calgary.
Under shareholder pressure, Parkland said in March it would review options to boost its share price, including a sale of the entire company. Earlier this month, longtime Parkland CEO Bob Espey announced plans to step down before year-end.
"There is a clear case for substantial change," ISS said in its report.
"However, the bar for a control slate is high, and the dissident has not cleared it outright. At this stage, the board needs to be reconfigured to ensure that the CEO search and the strategic review are carried out in accordance with the best interests of shareholders."
Parkland has said it aims to reduce its board to 11 members from 13 by the end of next year as more senior directors retire, meaning the Simpson slate could end up holding the majority.
"The risk of this outcome is outweighed by the need for substantial change," said ISS.
"Moreover, the downside if the dissident secures control is limited, as the dissident's plan appears to be well-reasoned, despite lacking the depth that shareholders generally require in order to be comfortable supporting a control slate."
The recommendation from ISS comes after another proxy advisory firm, Glass Lewis, also said an entire board overhaul was not warranted.
But Glass Lewis is calling for the split to be the other way around — seven board seats for the dissident and six for Parkland management.
This report by The Canadian Press was first published April 30, 2025.
Companies in this story: (TSX: PKI)
Lauren Krugel, The Canadian Press
