Towerstream – August 21, 2015 AGM

Home » Towerstream – August 21, 2015 AGM

Disclaimer: These are excerpts from student assignments conducted as part of a Corporate Finance class. I do not vouch for the quality of the recommendations or the accuracy of the numbers. Opinions represented are not necessarily my own. Follow the recommendations on your own risk.

Click here for the proxy statement: http://ir.towerstream.com/secfiling.cfm?filingID=1437749-15-13350&CIK=1349437

Third #AGM for @LSEPKUSummerSch #CorpFin #students voting recommendations: #Towerstream $TWER

#Students sceptical about re-electing Haronian as #director, not independent as cousin of co-founder #Towerstream $TWER #AGM

#Students also worry about high age of directors, recommend #succession plan #Towerstream $TWER #AGM @LSEPKUSummerSch

Share #issuance authorization appropriate according to @LSEPKUSummerSch #students recommendations to finance expansion and acquisitions #Towerstream $TWER #AGM

#SayonPay at #Towerstream $TWER #AGM: #Students question discretionary bonus, prefer #longterm equity compensation

#SayonPay at #Towerstream $TWER #AGM: #Students on discretionary bonus implemented after COO departure: #recruit new #COO instead

#Towerstream $TWER #AGM: #Students question discretionary bonus, prefer #longterm equity compensation

#Towerstream $TWER #AGM: #Students recommend restructuring of unprofitable (Philadelphia) or shrinking units (SanFrancisco) instead of #acquisitions

Proposal Excerpt of Student Recommendations
For Against
Election of directors
  • Expertise and knowledge: “All … have been working … at least five years. They are all specialists in different areas…”
  • “..bring a variety of skills, qualifications… carry out their oversight role on behalf of shareholders”
  • “re-election.. would enable the continued development”
  • Haronian: “…he does however not have extended knowledge in the wireless broadband industry. Being a cardiologist, he is expected … to be an independent director. Yet since he served since 1999, he cannot be considered as such anymore…. especially so given that he is the cousin of co-founder Philip Urso.”
  • Age: “Notice their agess and health conditions for potential earlier resignation and consider capable successors in contingency.”
Increase the authorized number of shares of common stock
  • Shares needed to finance further acquisitions and expansion as well as to stabilize capital structure, “in the long run, would contribute to revenue”
  • “right window to sell .. prevailing market price”
  • “…a …dilution risk of stock ownership and voting rights for the existing shareholders,… probably making the stockholders frustrated”
Auditor ratification
  • Good reputation and reasonable fees
Say-on-Pay
  • “pay-for-performance, equity-based incentive programs… that are consistent with stockholders’ interests and current market practices”
  • “…would enable us to retain and prevent the executive officers from working for our competitors,… making them more committed”
  • “..affordable, flexible and competitive”
  • “…negative cash flows but the Executive Officers are receiving at least 50% of their pay as their bonuses”
  • “in 2013, … migrated to a simplified, discretionary process of awarding executive bonuses, in part as a result of the departure of the company’s COO… this high level of discretion … is not to be welcomed… firm shoudl more rather adopt the previous compensation policy, and find a new COO, rather than allowing the CEO and CFO to take over this role, which led to a steep increase in bonuses
  • Should focus on more long-term compensation and less bonus

Other recommendations

  • Potential acquirers: “Microsoft, which owns MSN,.. looking to acquire firms like EarthLink, which is one of Towerstream’s competitors.”
  • Restructuring: “Together with more and more fierce competition in San Francisco, negative sales growth has been recorded in the past two years. .. San Francisco consistently became the outliner, dragging down the company overall profit margin… it is advise to close the sales deal. After selling the San Francisco asset, Towerstream should then migrate the focus on wireless segment by investing more money on improving quality and introducing new services.”
  • Restructuring: “Philadelphia market is operating at a loss… strong competition with major rivals like AT&T and Verizon…”

Outcome

https://www.sec.gov/Archives/edgar/data/1349437/000143774915016388/twer20150824_8k.htm

Proposal For Against Abstain Broker Non-Votes
1. Election of five directors:
    Philip Urso 34,035,239 1,125,544 183,076 25,626,587
    Jeffrey M. Thompson 34,586,431    163,371 594,057 25,626,587
    Howard L. Haronian, M.D. 33,748,025 1,387,258 208,576 25,626,587
    Paul Koehler 35,015,643    130,940 197,276 25,626,587
    William J. Bush 35,042,662   104,676 196,521 25,626,587
2. Charter Amendment 44,035,706 16,479,889 454,851 N/A
3. Auditor Ratification 59,329,850 1,082,538 558,058 N/A
4. Advisory Vote on Executive Compensation 33,901,534 1,270,897 171,428 25,626,587