Top proxy firm guides against McGann vote for Aryzta job
Global proxy advisor concerned about demands of Paddy Power Betfair role, writes Samantha McCaughren
A LEADING shareholder proxy advisor has recommended that investors vote against Gary McGann becoming the new chairman of the food group Aryzta over concerns about the number of directorships he holds.
Institutional Shareholder Services (ISS), which issues advice for investors, raised McGann’s workload in his role as chairman of Paddy Power Betfair. McGann is also non-executive director of three other listed companies.
Aryzta moved to allay concerns over McGann’s directorships last month. A letter from outgoing chairman Denis Lucey to shareholders said that under Aryzta’s articles of association, only three external public company mandates could be held. He said the issue would be dealt with “no later than six months” after the appointment. He said McGann was fully aware of the time commitments involved. However, in an updated alert, ISS did not change its recommendation.
ISS said: “Whilst it is recognized that McGann is an experienced director and former executive, there are concerns regarding McGann’s potential workload and whether it would allow him to devote sufficient time to his mandate at Aryzta.” It referenced the integration of Paddy Power and Betfair, although market sources said this was now completed.
“McGann would now be entrusted with overseeing a potentially difficult period at Aryzta... plus additional board work from other mandates,” said ISS.
ISS said in a note issued after Lucey’s letter that “considerable outside demands on the new board chairman would represent a governance risk for Aryzta, at least in the short term”. It noted that in spite of this some shareholders might wish to support McGann’s election at the Aryzta AGM on Tuesday.
Glass Lewis, another leading advisory, also flagged concerns, although on balance was in favour of the appointment. “We believe that the time commitment required by this combination of board chairmanship/memberships may preclude this director from dedicating the time necessary to fulfil the responsibilities required of a director, especially considering the extensive time commitment generally required of a FTSE 100 board chairman.”
However, it said “we believe that shareholders will be able to make an informed evaluation of the appropriateness of Mr McGann’s position on the board on a regular basis”.
A spokesman for Paddy Power Betfair said McGann would continue to be chairman for the foreseeable future.