Myers Industries Inc.’s largest shareholder still wants a seat on the Akron manufacturer’s board of directors and says the company is underperforming and is undervalued.
For the fifth year in a row, investment firm GAMCO Asset Management is waging a proxy contest with Myers for the company’s nine-person board. All board members are up for election.
Myers declined to comment on GAMCO’s proxy filing.
Where Rye, N.Y.-based GAMCO in previous years unsuccessfully ran two or more candidates for Myers’ board, this time it is running one person. Daniel R. Lee, 56, the managing partner of casino developer Creative Casinos LLC, is running for a one-year term. Lee is also a director of GAMCO subsidiary Gabelli Securities.
GAMCO, founded and run by well-known activist investor Mario Gabelli, owns 15.72 percent of outstanding Myers shares, according to the latest filing with the Securities and Exchange Commission. That works out to 5.314 million shares in the company. GAMCO is a longtime shareholder in Myers, which makes plastic and rubber products and is a distributor of specialized tire and motor vehicle tools.
That is slightly less stock than a year ago when GAMCO reported owning 5.32 million shares, or 15.9 percent of Myers outstanding shares.
This year’s annual meeting is scheduled for 9 a.m. April 26 at the Louis Myers Training Center on South Main Street.
“We are seeking to change a minority of the board to ensure that the interests of the shareholders, the true owners of the company, are appropriately represented in the boardroom,” Gabelli said in a letter filed with the GAMCO proxy statement.
The proxy statement said that GAMCO has little confidence that the board as currently composed is taking the necessary steps to enhance shareholder value. It said it is concerned that Myers’ board — other than CEO John Orr — collectively owned less than 1 percent of Myers’ shares. Myers’ proxy said that Orr owned 894,177 shares, or 2.6 percent of the company; the other eight board members owned a combined 293,749 shares.
The GAMCO proxy also noted that its board director candidate, Lee, did not own shares of Myers at the time the document was filed. The firm said that it believes Lee will bring a “fresh perspective into the boardroom” and help unlock value at the company.
Besides deciding on nine directors, shareholders will be asked to appoint Ernst & Young LLP as Myers’ public accounting firm, adopt an executive performance bonus plan, and vote on a nonbinding “say on pay” for executive compensation.
Myers reported net income of $29.9 million, or 88 cents per share, on revenue of $791.2 million for fiscal 2012. Net income was up 22.3 percent from $24.5 million in fiscal 2011; revenue was up 4.7 percent from $755.7 million a year ago. The company also increased its quarterly dividend 12.5 percent from 8 cents to 9 cents effective April 1 this year.
Shares of Myers Industries on Tuesday fell 21 cents to $13.77. Shares are down 8.6 percent, including dividends, since Jan. 1 and are down 2.8 percent from a year ago.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.