Shareholders of XPO Logistics, Inc. (NYSE: XPO) on Wednesday defeated a Teamsters union proposal to separate the chairman and CEO posts and appoint an independent director to serve as the company's chair, a proposal that could have removed XPO Founder, Chairman and CEO Brad Jacobs from the chairman's role.
The proposal was "soundly" defeated at the Greenwich, Connecticut-based company's annual shareholder meeting. The non-binding proposal was supported by prominent shareholder advisory firms Glass, Lewis & Co. and Institutional Shareholder Services (ISS), both of whom said that, in general, an independent chair can oversee a company's executives and set a pro-shareholder agenda without the inherent conflicts confronting a CEO or other executive insiders.
The Teamsters, who have been embroiled in an acrimonious battle with XPO over representation issues, also raised concerns that the company's recent performance served as justification to split the roles. XPO, which opposed the proposal, said that Jacobs has created significant shareholder value while holding both roles since 2011, and that separating the positions would impede the pace and effectiveness of corporate decision-making.
XPO had reported disappointing third and fourth quarter financial results, was the subject of a scathing short-seller's report in December, and has lost two-thirds of the business from its largest customer, known to all – though never publicly acknowledged by XPO – as Amazon.com, Inc. (NASDAQ: AMZN). The price of XPO shares had fallen from $116 a share at the end of September 2018 to the low $40 a share range in March.
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