Farmer Brothers says ISS backing its directors in proxy fight

Farmer Brothers says it has won the support of an influential proxy advisory service in its battle with dissident shareholders over three board seats.

The Fort Worth-based coffee company said Institutional Shareholder Services is recommending that stockholders vote for the company’s slate of three directors rather than three candidates nominated by the Save Farmer Bros. opposition group.

In making its recommendation, ISS said it’s difficult to dispute that the current board and CEO have been instrumental in the turnaround at Farmer Brothers, while the dissident group has “failed to present any future plan for the company that is clearly superior to the strategy developed by the current board.” ISS offers recommendations on proxy votes for institutional shareholders.

The Save Farmer Bros. group is led by Carol Farmer Waite, the granddaughter of the company’s founder, and has nominated three three directors for the company's seven-member board. The group has criticized management for capital spending decisions, including the relocation of its headquarters to North Texas from Torrance, Calif., and claims the company’s stock is undervalued.

Farmer has responded by pointing out that its stock price has more than tripled since 2012, which Michael Keown was named CEO, and that moving to the new headquarters, now under construction in Northlake across from the Texas Motor Speedway, will save millions.

The war of words continues. In a release this week, Save Farmer Bros. accused the company of “distortions and misrepresentations,” including the use of asset sales, inventory liquidation and one-time income tax benefits to mask bloated corporate expenses.

The showdown occurs on Dec. 8 at the company’s shareholders meeting at the Marriott Hotel at Champions Circle in far north Fort Worth.

This story was originally published November 25, 2016 at 3:48 PM with the headline "Farmer Brothers says ISS backing its directors in proxy fight."