Neuberger Berman is backing an investor effort to gain the power to call special meetings of Nuance Communications shareholders, with a vote on the initiative due this week.
In a public letter issued on December 12, 2017, Neuberger Berman – which had roughly $295 million in assets under management as of December 31, 2017 – complained about the process and transparency of Nuance’s CEO succession plan, as well as the company’s corporate governance practices.
‘We note that today, 14 months after [Nuance] CEO Paul Ricci announced his retirement and only a few weeks before he is about to retire, shareholders have not received any meaningful update about the CEO succession, and a new CEO has not been announced,’ Neuberger Berman says in a follow-up statement issued last week. ‘We remain concerned as to the Nuance board’s ability to execute the announced CEO succession plan, and the departing CEO’s influence on the process.’
Nuance holds its AGM this Wednesday, ahead of which a shareholder has entered a proposal asking that the board grant holders of an aggregate 10 percent in company stock the power to call a special shareowner meeting. ‘Dozens of Fortune 500 companies allow 10 percent of shares to call a special meeting,’ the proposal states.
‘This proposal is particularly important because we do not have the opportunity to act by written consent. Dozens of Fortune 500 companies provide for shareholders to call special meetings and to act by written consent. If our management adopts this proposal it will be one sign that management values our shareholder input.’
In its own statement, Neuberger Berman says it believes the shareholders’ right to call a special meeting ‘will allow shareholders to act in case the board fails to execute on the succession plan and prevent a delay of the decision for another year.’ The firm adds that it believes shareholders’ ability to call a special meeting is a fundamental right, a stance it has codified in its governance and proxy voting guidelines.
‘The proposal is especially important for Nuance shareholders, given the absence of a right to act by written consent or a majority vote, a history of poison pill adoption and several years of poor support for board proposals at shareholder meetings,’ Neuberger Berman says. ‘We note the board has chosen not to issue a recommendation on this shareholder proposal, which we see as a positive step in improving the company’s overall governance profile.’
A spokesperson for Nuance did not respond immediately to a request for comment.