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Bill Gates wants board changes at Schnitzer Steel
New York, Aug 06: Bill Gates, Microsoft chairman and billionaire investor, is increasing pressure on family-controlled Schnitzer Steel Industries, one of his holdings, to add more independent directors to its board.
New York, Aug 06: Bill Gates, Microsoft chairman and billionaire investor, is increasing pressure on family-controlled Schnitzer Steel Industries, one of his holdings, to add more independent directors to its board.
In a regulatory filing on Tuesday, Gates' personal investment vehicle Cascade Investment LLC disclosed it is considering further reducing its 7.7 per cent stake in the closely held Portland, Oregon-based steelmaker and recycler, complaining there has been no improvement in corporate governance during the past year.
Cascade, also citing concern about unspecified stock sales by Schnitzer insiders, said it sold 77,000 Schnitzer shares between July 16 and August 4, leaving it with 418,200 shares.
Schnitzer shares, which fell 58 cents to $44.42 in Nasdaq National Market trade on Tuesday, have fallen 2.4 per cent in that period. Schnitzer is one of the largest US recyclers of ferrous metals and makers of finished steel products. According to the filing, Cascade in August 2002 asked Schnitzer to modify its board so that independent directors would comprise the majority. It also submitted a shareholder proposal requiring directors to nominate a majority of independent directors.
Currently three of the board's 11 seats can be considered independent, Schnitzer spokesman Tom Zelenka said. Family members dominate the audit and compensation committees, he said.
The proposal was rejected by Schnitzer's board and by holders of Class B shares, each having 10 votes. Cascade said 80 per cent of Class A shareholders, mostly public investors, supported the proposal.
The spokesman said the founding Schnitzer family retained more than 50 per cent of voting control with the Class B shares after taking the company public in 1994.
Zelenka acknowledged there have been insider stock sales in the past year, though he declined to comment on individual transactions. He noted family members were taking advantage of a strong market for the shares and said over the past decade insider sales have been "limited". "There also have been several deaths to senior members of the family," Zelenka said, prompting some estate-related sales. Founding member Leonard Schnitzer died about a month ago while Manuel Schnitzer passed away in March, he said.
In Tuesday's filing, Gates' Cascade said it is considering submitting another, similar shareholder proposal and is evaluating its Schnitzer stake. Cascade may retain, expand or reduce its stake.
Officials at Kirkland, Washington-based Cascade could not be reached immediately for comment, and a Microsoft spokesman said the company does not comment on the investment activities of Gates or Cascade.
Bureau Report
Cascade, also citing concern about unspecified stock sales by Schnitzer insiders, said it sold 77,000 Schnitzer shares between July 16 and August 4, leaving it with 418,200 shares.
Schnitzer shares, which fell 58 cents to $44.42 in Nasdaq National Market trade on Tuesday, have fallen 2.4 per cent in that period. Schnitzer is one of the largest US recyclers of ferrous metals and makers of finished steel products. According to the filing, Cascade in August 2002 asked Schnitzer to modify its board so that independent directors would comprise the majority. It also submitted a shareholder proposal requiring directors to nominate a majority of independent directors.
Currently three of the board's 11 seats can be considered independent, Schnitzer spokesman Tom Zelenka said. Family members dominate the audit and compensation committees, he said.
The proposal was rejected by Schnitzer's board and by holders of Class B shares, each having 10 votes. Cascade said 80 per cent of Class A shareholders, mostly public investors, supported the proposal.
The spokesman said the founding Schnitzer family retained more than 50 per cent of voting control with the Class B shares after taking the company public in 1994.
Zelenka acknowledged there have been insider stock sales in the past year, though he declined to comment on individual transactions. He noted family members were taking advantage of a strong market for the shares and said over the past decade insider sales have been "limited". "There also have been several deaths to senior members of the family," Zelenka said, prompting some estate-related sales. Founding member Leonard Schnitzer died about a month ago while Manuel Schnitzer passed away in March, he said.
In Tuesday's filing, Gates' Cascade said it is considering submitting another, similar shareholder proposal and is evaluating its Schnitzer stake. Cascade may retain, expand or reduce its stake.
Officials at Kirkland, Washington-based Cascade could not be reached immediately for comment, and a Microsoft spokesman said the company does not comment on the investment activities of Gates or Cascade.
Bureau Report