Page 9 of 13 – SEC Filing We plan to vote against the following Board sponsored proposals: – Against the issuance of additional shares of CTO
– Against the re-election of each director
– Against the ratification of the appointment of Grant Thornton, LLP as auditor
– Against the advisory vote to approve executive compensation
As outlined in detail below, we believe these items are not in the best interest of CTO shareholders, and that shareholders deserve better than this. Item 1. We intend to vote against the re-election of all 7 directors. We believe that the Board has failed to look out for the best interests of CTO shareholders. The Board’s latest transgression is a proxy statement that includes a proposal to issue more than 1.3 million shares, which could by our calculations, result in dilution of over 23% for existing shareholders. We do not believe there is a beneficial reason to shareholders for this issuance and think that better financing options are clearly available. Additionally, we view the proposal to increase compensation for what we believe to be a failed management team is egregious and another indication that the Board needs to be replaced. Further, we have reached out to the Board on multiple occasions in an attempt to work with the Board on the issues that we have identified, but we have not received a satisfactory response. In our view the Board has expressed an interest to rubber stamp management’s actions and is no longer focused on its true role – to look after the interests of CTO shareholders. Item 2. We intend to vote against the ratification of the appointment of Grant Thornton as auditor. In a series of letters to the Board2, we have identified what we believe to be deficiencies in CTO’s publicly filed reports. We also find it alarming that over a two-year period, Grant Thornton’s audit fees have doubled without a clear explanation to CTO shareholders as to why this has occurred. We believe that the engagement of a new audit firm that can undertake a thorough review of CTO’s financial statements and disclosures would benefit all shareholders. Item 3. We intend to vote against the approval of executive compensation. We think increasing John Albright’s total compensation (including stock and option awards) by over five times his 2015 compensation is reckless, destructive, and undeserved. We believe CTO’s recent share price performance has been abysmal. Its -5.5% performance in 2015 fell well behind both the overall S&P 500’s return of +1.4% and the REIT Index’s return of +1.4%3. With the rebound in local real estate prices, and the low interest rate environment, we believe management’s actions have detracted from share performance and absolutely no increase in compensation is warranted. We also find it very curious that CTO has shifted the membership of its peer group twice in the last three years, and also uses a different listing of “peers” in CTO’s investor presentations than what is contained in CTO’s annual report. We think this constant shifting and misdirection has become all too commonplace for this management team and shareholders should not reward this type of behavior.
2 Wintergreen has written to the Board on multiple occasions, including our letters dated December 17, 2015: “Wintergreen Sees Possible Securities Law Violations at CTO”, January 12, 2016: “Wintergreen Cites What It Sees as Further Disclosure Failings at CTO”, and February 17, 2016: “Wintergreen Pleased That CTO has hired Deutsche Bank to pursue the directive of Wintergreen’s Proxy Proposal”, among others. 3 Consolidated-Tomoka Land Co: Investor Presentation, March 7, 2016, page 8. Follow Cto Realty Growth Inc. (NYSE:CTO)
Follow Cto Realty Growth Inc. (NYSE:CTO)
We may use your email to send marketing emails about our services. Click here to read our privacy policy.
We plan to vote against the following Board sponsored proposals:
| – | Against the issuance of additional shares of CTO |
| – | Against the re-election of each director |
| – | Against the ratification of the appointment of Grant Thornton, LLP as auditor |
| – | Against the advisory vote to approve executive compensation |
As outlined in detail below, we believe these items are not in the best interest of CTO shareholders, and that shareholders deserve better than this.
Item 1. We intend to vote against the re-election of all 7 directors.
We believe that the Board has failed to look out for the best interests of CTO shareholders. The Board’s latest transgression is a proxy statement that includes a proposal to issue more than 1.3 million shares, which could by our calculations, result in dilution of over 23% for existing shareholders. We do not believe there is a beneficial reason to shareholders for this issuance and think that better financing options are clearly available. Additionally, we view the proposal to increase compensation for what we believe to be a failed management team is egregious and another indication that the Board needs to be replaced.
Further, we have reached out to the Board on multiple occasions in an attempt to work with the Board on the issues that we have identified, but we have not received a satisfactory response. In our view the Board has expressed an interest to rubber stamp management’s actions and is no longer focused on its true role – to look after the interests of CTO shareholders.
Item 2. We intend to vote against the ratification of the appointment of Grant Thornton as auditor.
In a series of letters to the Board2, we have identified what we believe to be deficiencies in CTO’s publicly filed reports. We also find it alarming that over a two-year period, Grant Thornton’s audit fees have doubled without a clear explanation to CTO shareholders as to why this has occurred. We believe that the engagement of a new audit firm that can undertake a thorough review of CTO’s financial statements and disclosures would benefit all shareholders.
Item 3. We intend to vote against the approval of executive compensation.
We think increasing John Albright’s total compensation (including stock and option awards) by over five times his 2015 compensation is reckless, destructive, and undeserved. We believe CTO’s recent share price performance has been abysmal. Its -5.5% performance in 2015 fell well behind both the overall S&P 500’s return of +1.4% and the REIT Index’s return of +1.4%3. With the rebound in local real estate prices, and the low interest rate environment, we believe management’s actions have detracted from share performance and absolutely no increase in compensation is warranted. We also find it very curious that CTO has shifted the membership of its peer group twice in the last three years, and also uses a different listing of “peers” in CTO’s investor presentations than what is contained in CTO’s annual report. We think this constant shifting and misdirection has become all too commonplace for this management team and shareholders should not reward this type of behavior.
2 Wintergreen has written to the Board on multiple occasions, including our letters dated December 17, 2015: “Wintergreen Sees Possible Securities Law Violations at CTO”, January 12, 2016: “Wintergreen Cites What It Sees as Further Disclosure Failings at CTO”, and February 17, 2016: “Wintergreen Pleased That CTO has hired Deutsche Bank to pursue the directive of Wintergreen’s Proxy Proposal”, among others.
3 Consolidated-Tomoka Land Co: Investor Presentation, March 7, 2016, page 8.
Follow Cto Realty Growth Inc. (NYSE:CTO)
Follow Cto Realty Growth Inc. (NYSE:CTO)
We may use your email to send marketing emails about our services. Click here to read our privacy policy.
