Vote the Green Proxy Card
At CTO’s Annual Meeting on
We believe that the current Board of Directors has failed shareholders by not allowing CTO to achieve its full potential. It is time for change at CTO!
We strongly urge you to vote the GREEN proxy card to elect directors that are here for you. Your vote does count.
Wintergreen’s nominees, representing 27.2% of shares outstanding will act in the interests of all shareholders. For too long, CTO has had a ‘rubber stamp’ board.
IT IS TIME FOR CHANGE AT CTO.
We appreciate your support.
Please vote the GREEN proxy card.
Visit http://www.EnhanceCTO.com for more information about this proxy solicitation.
The full text of the letter is included below.
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CTO’s Directors Have Failed
It is time for shareholders to take a stand against a pattern of excessive compensation, poor disclosure, investment speculation, and a lack of supervision.
Dear Shareholder:
Your vote counts. At Consolidated-Tomoka Land Co.’s (“CTO” or the “Company”) Annual Meeting on
We believe that the current Board of Directors (the “Board” or “Directors”) has failed shareholders and has not allowed CTO to achieve its full potential. It is time for change at CTO!
We strongly urge you to vote the GREEN proxy card and elect candidates that are here for you.
Your vote does count.
CTO Directors have FAILED – CTO has Underperformed. |
The record speaks for itself. CTO has underperformed. Despite this, management continues to be handsomely rewarded. THIS MUST BE STOPPED. Since CTO lost focus, which became apparent in 2015, with the Board’s infatuation with speculative deals, attempts to dilute shareholders, excessively compensating management, and pursuing poorly thought out investment property purchases, CTO has underperformed. These are the actual numbers over the past two years, which were produced in a great real estate bull market in Daytona and throughout the country: From |
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CTO: Total Return – 0.78% (negative) |
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CTO’s Directors have FAILED on Compensation |
Compensation Committee members CTO’s Directors approved total compensation of over Fortunately, over 55% of votes cast rejected the 2016 compensation plan in an advisory Say on Pay vote. However, instead of taking the shareholders’ legitimate concerns to heart and designing a fair and shareholder-friendly plan, in 2017 the Board wasted shareholder funds by hiring multiple consultants to come up with a compensation scheme that is even worse. This new scheme has, among its many problems:
This extremely flawed compensation scheme is, unfortunately for CTO shareholders, a case of “been there, done that”. In 2015, the Board approved compensation that was so excessive, it violated the terms of CTO’s own compensation plans, resulting in the return of tens of thousands of shares. Instead of recognizing this as an issue of excessive pay as soon as it was permitted, the Board immediately reissued a good portion of the returned shares. As a result, CTO’s shareholders will now pay an unnecessarily high tax bill, because of the Board’s error. Wintergreen believes that management should be paid well for strong performance. However, we do not believe that executive compensation plans should be a giveaway to management. Perhaps if the current Board held more shares in CTO, they would think like owners and actually represent the interests of shareholders. Wintergreen owns more than 27% of the company and has an interest in creating a compensation plan that adequately incentivizes management, but is not a blank check. This starts with tying pay to performance and enforcing a meaningful clawback so that if management misbehaves, they will be held accountable. |
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CTO’s Directors have FAILED on Governance | Nominees Wintergreen had to file a lawsuit against the company and its Directors in order to give shareholders the opportunity to have well-qualified candidates challenge the current Board. After much wasted time and energy, along with significant legal fees, the lawsuit was settled; with CTO agreeing to all of Wintergreen’s terms. The time and money spent trying to block CTO’s largest shareholder from proposing board nominees, a core right of shareholders, should have been spent on improving returns for shareholders. Wintergreen’s nominees will act in the interests of all shareholders because our interests are aligned with those of other CTO shareholders. For too long this has been a ‘rubber stamp’ board, and it is time for change. The Wintergreen nominees will create a culture at CTO where the board and management think like owners. |
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CTO’s Directors have FAILED to Protect Shareholders from Dilution | CTO nominees At the 2016 Annual Meeting CTO’s Directors recommended a vote in favor of a proposal that would have allowed for the issuance of over 1.3 million new shares, which would have resulted in dilution of over 23%. To help illustrate what this dilution means for a shareholder of CTO, if the proposal had been implemented and the Company had issued the full amount of the requested shares, a shareholder who owned Wintergreen opposed the Board’s proposed dilution plan, and in contrast will listen to shareholder requests that shares be bought back when the Company is trading at a discount to NAV, with shares being retired, so all shareholders benefit. As the largest shareholder of CTO, Wintergreen’s interests are aligned with those of other shareholders and we would seek to decrease dilution for the benefit of all shareholders. |
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CTO’s Directors have FAILED to Supervise Management |
Hostile Takeover: CTO nominees In 2015, The Forestar deal made no sense strategically because the Forestar portfolio was not consistent with CTO’s then current holdings. In addition, CTO management did not have the expertise to successfully operate Forestar. As a result, Wintergreen opposed this ill-conceived plan. If CTO’s Directors were doing their job of representing the interests of shareholders, this plan never would have seen the light of day. This is yet another example of the CTO Directors failing to stand up to management.
In the first quarter of 2015, the Company purchased approximately |
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CTO’s Directors have FAILED by Approving Transactions that Put ALL Shareholders at Risk | CTO nominees Over 66% of net operating income from the so-called 1031 Income Property portfolio is below investment grade. The Board is allowing management to speculate with shareholder assets, which puts the future of the Company at risk. For example, in their rush to complete deals to window dress results ahead of the Annual Meeting, CTO recently announced that it has invested over CTO also has a shareholder unfriendly habit of announcing deals at one price, then marking them down, perhaps to expedite the closing, which helps management to meet bonus criteria. A recent example was for ICI, where the Company reduced the price by over Wintergreen’s nominees will work to restructure CTO’s income property portfolio to ensure that it has a common theme and makes sense. The goal of every single transaction should be to increase the value of the portfolio for shareholders. Any other motivations, such as maximizing the volume of transactions in order to earn a bigger bonus, hurt shareholders and should not be considered. |
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CTO’s Directors have FAILED by Allowing Management to Thwart a Full and Fair Review of the Company | At the 2016 Annual Meeting of Shareholders, over 69% of the total votes cast supported Wintergreen’s proposal to hire an independent advisor to review strategic alternatives to maximize shareholder value.
Although the Company hired Deutsche Bank to undertake this task, we believe the strategic review was an unmitigated disaster and destined to fail from the start. The blame for this failure, including the failure to learn anything from the process, falls squarely on the Company’s Board and management. In phone conversations Wintergreen had with Deutsche Bank after the strategic review, we learned that Deutsche Bank described the process as merely an accommodation to a client with whom they had an existing relationship. This was not the strategic review envisioned by our shareholder proposal. We stand by our statement that the Company conducted their strategic review under the cloak of darkness and failed to meaningfully communicate to shareholders during and after the process. After the commencement of the strategic review process, CTO management initiated a flurry of sales that included 18 income properties, a failed attempt to sell subsurface mineral rights, multiple land sales and announced a mortgage financing, which we believe made it impossible for prospective buyers to understand the Company’s assets. In addition, we believe the transactions were curiously timed to meet bonus goals. At the conclusion of the process, the Company refused to disclose material details of the review, including what types of offers, if any, were received. Despite repeated shareholder requests for more information, management refused to provide information until 4 months after the conclusion of the process, when investors at the Company’s First Annual Investor Day demanded this information in person. Perhaps due to these transactions and what we believe is the Company’s currently disorganized and unfocused 1031 portfolio and scattered real estate holdings, beyond the land bank it has been in the process of selling for years, the Company failed to attract bids at a meaningful premium to the stock price. Wintergreen’s nominees, representing 27.2% of shares outstanding will act in the interests of all shareholders. For too long, CTO has had a rubber stamp board. IT IS TIME FOR CHANGE. |
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We appreciate your support.
Please vote the GREEN proxy card.
Visit http://www.EnhanceCTO.com for more information about this proxy solicitation.
If you have any questions, please call
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Wintergreen’s Highly Qualified Candidates:
Prior to forming
Please vote the GREEN proxy card.
Visit http://www.EnhanceCTO.com for more information about this proxy solicitation.
Wintergreen Advisers to Hold Informational Webcast on Consolidated-Tomoka Proxy Contest
The webcast is open to all Consolidated-Tomoka Land Co. shareholders, as well as corporate governance analysts and members of the media.
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WEBCAST: |
The event will be accessible via live webcast by logging on directly to: |
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Event Number: 662776229 |
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An audio-only version of the event can be accessed by calling: |
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+1-844-740-1264 |
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+1-240-454-0879 |
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User Passcode: 662776229 (required). |
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A Q&A period will follow the presentation, and those wishing to ask questions will have the option to do so via the WebEx meeting.
Participants are advised to register in advance, as capacity is limited.
ADDITIONAL INFORMATION
The participants in the proxy solicitation are Wintergreen Fund, Inc.,
The proxy statement is available at no charge on the SEC’s website at http://www.sec.gov. In addition,
Toll Free: 800‐662‐5200
Banks and Brokerage Firms Call Collect: 203‐658‐9400
About Wintergreen Advisers
Established in 2005 by
For further information on Wintergreen Advisers, please call 973-263-4500 or visit www.wintergreenadvisers.com. For information, forms and documents regarding our
View source version on businesswire.com: http://www.businesswire.com/news/home/20170413005909/en/
Makovsky
jmcinerney@makovsky.com
or
973-263-4500
press@wintergreenadvisers.com
Follow Wintergreen Advisers on Twitter: @WintergreenAdv
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