Toronto, Ontario: Fairfax Financial Holdings Limited (TSX:FFH)(TSX:FFH.U) announces that it is calling a special meeting of its shareholders to be held on July 21, 2015 to vote on a proposed amendment to its articles to preserve the current 41.8% voting power of its multiple voting shares, which are controlled by V. Prem Watsa, Fairfax’s Chairman and Chief Executive Officer, and to make certain additional changes, including memorializing that the holder of the multiple voting shares will never be able to profit, or receive any premium or benefit, from the special voting rights attached to the multiple voting shares. This proposal is the result of a careful and thorough Board process conducted under the supervision of an independently advised special committee of independent directors. The Special Committee and the Board have both unanimously recommended that shareholders vote in favour of the proposal.
As a result of the gradual dilution of the percentage of votes represented by the multiple voting shares from their original 85.2% in 1986 to the current level of 41.8%, Fairfax has reached the limit of its ability to issue subordinate voting shares to continue its acquisition-related growth without reducing Mr. Watsa’s effective controlling interest to a level at which the preservation of Fairfax’s culture and governance can no longer be assured. Preserving the voting power of the multiple voting shares, subject to certain limitations and subject to the terms and conditions of the proposal, is intended to allow future share issuances to finance continued growth while ensuring that Mr. Watsa remains for many years in a position to continue protecting Fairfax’s unique culture. The proposed amendments will not result in the permanent extension of Mr. Watsa’s voting control of Fairfax nor will it effect a change of control of Fairfax.
“Our culture and reputation, protected by the control provided by the multiple voting shares owned by me and my family, attract some of the best businesses and managers around the world to partner with Fairfax. It is important to maintain that control as we move forward, growing our business and attracting the best and the brightest in the future,” said Prem Watsa, Chairman and CEO. “It is also important to note that I have agreed for ten years not to increase my compensation, which has not changed since 2000.”
The proposal’s terms, effects and rationale are summarized in the letter to shareholders which will accompany the management proxy circular for the meeting: a copy of that letter follows and forms part of this news release. Full details regarding the proposal and the special meeting are set out in the management proxy circular, which is today being filed on SEDAR and posted on Fairfax’s website www.fairfax.ca. The resolution approving the amendment will require the approval of at least two-thirds of the votes cast at the special meeting by the holders of subordinate voting shares, voting separately as a class, as well as a majority of the minority vote of shareholders which will exclude votes cast by, among others, Mr. Watsa, certain related parties of Mr. Watsa and directors and officers of Fairfax. Shareholders of record as of the close of business on June 24, 2015 will be entitled to vote at the special meeting.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Copyright © 2014 - 2021 The Global Indian New Network (TGINN)