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Ephraim Fields Calls for Resignation of John D. Stewart from Board of Command Center

NEW YORK, NY / ACCESSWIRE / October 10, 2017 / Earlier today, Ephraim Fields of Echo Lake Capital issued the following letter to John D. Stewart, Board Chairman of Command Center Inc.:

To: John D. Stewart - Board Director of Investors Real Estate Trust, Minot, North Dakota

As one the company's largest shareholders, we believe you lack the skill set necessary to effectively serve as the Chairman of the Board of Command Center Inc. (CCNI) and that you have repeatedly failed to act in the best interests of shareholders. Considering how poorly CCNI and its stock have performed during your board tenure, we believe it is in the best interests of all shareholders if you resign immediately. In addition, we find it distasteful that during your four years as a CCNI director you have received over $260,000(1) in board fees while CCNI's stock price has performed poorly.

1) POOR STOCK PERFORMANCE DURING YOUR TENURE(2)

Since you joined the Board on November 7, 2013, CCNI's stock price has increased only 11.7%, while the Russell 2000 has increased 36.9%. This dramatic underperformance is especially infuriating considering the tremendous job growth that has occurred during this time in the USA, which CCNI has apparently failed to capitalize on.

2) YOUR BOARD COMPENSATION

We estimate you have received over $260,000 in compensation for your board service over the past four years. We consider this amount to be wildly excessive considering how poorly the company and its stock have performed and how small of a company CCNI is. As a frame of reference, your $260,000 of compensation equals one-third of CCNI's net income for all of 2016.

3) QUESTIONABLE BOARD ACTIONS

We believe that as the Board Chairman you have failed to act in the best interests of shareholders on many occasions and that your actions (or failure to act) have significantly harmed shareholders. In particular, we note that during your tenure CCNI has:

  • (i) Experienced disappointing revenue and earnings growth

  • (ii) Had 3 different CFOs in the past 13 months

  • (iii) Granted increased compensation to the CEO and general counsel, despite their questionable performance

  • (iv) Frequently failed to report quarterly results on time

  • (v) Suffered poor employee morale

  • (vi) Potentially failed to take appropriate write downs related to Freestone Insurance

  • (vii) Taken steps we consider to be unfriendly to shareholders including:
    - a. Postponing a previously scheduled annual shareholder meeting
    - b. Changing the corporate bylaws to make it more difficult for shareholders to submit Stockholder Proposals

4) YOUR SKILL SET

We wonder what skills you have that make you an appropriate Chairman for CCNI. Your bio indicates you have extensive experience in real estate as the president of a private multi-family residential and commercial real estate company. However, we fail to understand how that background is in anyway helpful for CCNI, a staffing company that owns no real estate. We also feel you lack the appropriate public company board experience. While we understand you are Vice Chairman (whatever that entails) of Investors Real Estate Trust (IRET), that company is in a completely different industry and the company and its stock face vastly different challenges than do CCNI. We note that IRET's stock price is down 25% over the past five years and down 13% this year alone.

Finally, if you think we are the only shareholders who are disappointed with your performance, we remind you that at CCNI's last shareholder meeting:

1. Of the seven directors who were up for election, you received one of the fewest votes in favor of your board candidacy
2. More than 50% of the shares that could have voted in favor of your board candidacy did not do so

Sincerely,

Ephraim Fields

Contact:

ef@echolakecapital.com

1 Assumes Mr. Stewart's 2017 compensation is unchanged from the $54,000 he received in 2016.
2 Based on closing stock prices for November 6, 2013 and October 10, 2017.

SOURCE: Echo Lake Capital

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