Proxy Firm Backs One Elliott Nominee in Alliance Trust Battle

A proxy voting company is backing one of three directors that Paul Singer’s Elliott Advisors wants installed on Alliance Trust Plc’s board, the third investor group this week to weigh in on the hedge fund’s battle to shake up the 127-year-old British money manager.

Glass, Lewis & Co. advised shareholders to vote in favor of Peter Chambers, the former chief executive officer of Legal & General Investment Management, according to a report sent to clients. The San Francisco-based firm advised investors vote against Elliott’s other nominees -- Anthony Brooke and Rory Macnamara -- citing “governance issues.”

“We believe that the election of one dissident nominee -– namely, Mr Chambers -– is acceptable,” Glass Lewis wrote in the report. He “appears to us to have an extensive background in fund management and investment banking, which should make him well qualified to serve on the board.”

Singer’s hedge fund has built up a 12 percent stake to become Alliance Trust’s largest shareholder and is proposing to add three new directors to the board. Institutional Shareholder Services Inc. and Pensions & Investment Research Consultants Ltd., which also advise institutional investors, this week backed Elliott’s bid to install all three men.

ShareSoc, which lobbies for individual investors, also endorsed the proposal. About 70 percent of Alliance’s shareholders are individual investors.

Glass Lewis said it had previous issues with Brooke when he headed the compensation committee of Huntsworth Plc and had advised voting against his election to the board in 2007, citing “excessive discretionary pay practices.”

Alliance Response

It also questioned Macnamara’s appointment, saying he may not have enough time to fulfill its duties, given he is already chairman of Dunedin Income Growth Investment Trust and Essenden Plc and is director of two other public companies.

Glass Lewis advises institutions that collectively manage more than $15 trillion globally.

Alliance Trust Chairman Karin Forseke sent a letter Friday urging shareholders to vote against Elliott’s resolutions, saying it was a “critical moment for the future of the company.” It has previously said the appointments couldn’t be deemed as independent and may seek to exert “undue influence.”

Shareholders will vote on Elliott’s proposal and its accounts at Alliance Trust’s annual general meeting on April 29. The Dundee, Scotland-based firm oversees about 6.4 billion pounds ($9.6 billion) of assets.

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