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TORONTO – Activist investor George Armoyan has called for the chief executive of Sherritt International Corp. to be fired, raising the animosity between the two sides ahead of a scheduled proxy showdown at next month’s annual meeting. In a circular filed Wednesday, Mr. Armoyan revealed he has been pushing Sherritt to replace CEO David Pathe with a “qualified executive who has operating experience.”
“The guy is not an operator; he’s not a leader. He was just put in there by default,” Mr. Armoyan, the CEO of Clarke Inc., said in an interview. He added that some Sherritt insiders, including former directors, have indicated to him that there is a vacuum of leadership at the company.
He said he has nothing against Mr. Pathe, but simply does not think he is CEO material. He noted that Mr. Pathe was an associate lawyer on Bay Street who joined Toronto-based Sherritt as assistant general counsel in 2007. He kept getting promoted, and six years later he was CEO. In Mr. Armoyan’s mind, he is not qualified to lead a mining company and Sherritt could recruit a much stronger candidate.
Sherritt did not comment on Mr. Armoyan’s plan to replace Mr. Pathe, but did state that the activist has not provided “any alternative to Sherritt’s current strategic plan or any credible ideas to increase shareholder value.” Both sides have said they are committed to cutting costs and reducing debt.
Mr. Armoyan, who controls 5.4% of Sherritt stock, claims the company’s directors have enriched themselves while failing to build value for shareholders. He said that Sherritt’s non-executive directors got paid an average of $362,000 last year, which is more than the directors of Apple Inc.
He wants to replace three of the existing board members (Peter Gillin, Dee Marcoux and Bernard Michel) with himself, Ashwath Mehra and David Wood. Mr. Mehra is a veteran mining executive who had a long stint at Glencore Xstrata PLC, while Mr. Wood is CFO of Municipal Group of Companies, a Canadian construction and mining infrastructure firm.
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