In an amended 13D filing after the close Monday on Brooks Automation Inc. (NASDAQ:BRKS), 6.4% holder Nierenberg Investment Management said they disagree with the recent recommendation by Institutional Shareholder Services and Glass Lewis which both told clients to withhold their votes from several incumbent Brooks Automation directors. The firm said they voted all of their shares enthusiastically to re-elect the entire BRKS director slate.
"We believe that the formulaic approach taken by ISS and GL would, if followed in this case, cause shareholders to withhold votes from directors who have been doing difficult work exceptionally well. We believe that doing the right thing should be rewarded, not punished."
From the Purpose of Transaction section of the filing:
Recently Institutional Shareholder Services [ISS] and Glass Lewis [GL] recommended that clients withhold their votes from several incumbent Brooks Automation (BRKS) directors. We strongly disagree with ISS and GL and have voted all of our shares enthusiastically to re-elect the entire BRKS director slate.
We believe that the Board of Directors of BRKS has improved dramatically the quality of its corporate governance in the past year. First, the Board announced that former Chairman and CEO Robert Therrien would not be re-nominated for another term on the Board. Second, when the Wall Street Journal broke the story last March about the appearance of back-dated stock option grants made to Mr. Therrien, the Board immediately appointed a special committee of newer, independent directors to examine the matter and empowered the special committee to engage independent legal and accounting counsel. Later, after several months of intensive examination of the Therrien and other suspect stock option grants,the two board members who had been the Board's compensation committee at the time the Therrien grants were made resigned from the Board of Directors. Now BRKS' Board has a capable new Chair; the former Lead Director is no longer on the Board; and BRKS' compensation committee and its nominating and governance committee also have new Chairs. The company is publicly committed to cooperatingfully with federal examinations of past option practices and to never repeating the unfortunate practices of the past. Fundamentally, we believe that BRKS has a strong balance sheet, a sensible corporate strategy, and excellent management to execute the strategy.
None of the directors opposed by ISS and GL served on the BRKS Board when the problematic stock options were granted to the former Chairman and CEO. In fact, directors Robert Lepofsky and Mark Wrighton did not join BRKS' Board until the company acquired Helix Technology late in 2005. Director Krishna Palepu joined the Board at about the same time precisely to improve the quality of its governance.
In conclusion, we have voted enthusiastically to re-elect all eight incumbent BRKS directors. We believe that the formulaic approach taken by ISS and GL would, if followed in this case, cause shareholders to withhold votes from directors who have been doing difficult work exceptionally well. We believe that doing the right thing should be rewarded, not punished.