Board change needed at Parkland, but not as drastic as dissident wants: advisory firm

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CALGARY — A prominent shareholder advisory firm says it agrees with activist investor Simpson Oil that board change is needed at fuel retailer and refiner Parkland Corp., but is stopping short of calling for a complete overhaul.

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Glass Lewis recommends in a report that shareholders vote for seven of the nine Simpson director nominees and for six of the 13 put forward by Parkland’s management.

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“At initial glance, we were open to the view that less dramatic change might suffice, particularly given the extent of recent board refreshment and the fact that the company was beginning to act on some of the governance and strategic priorities raised by the dissident,” the firm wrote in a recent report.

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“However, upon closer review, we believe the board’s record suggests a consistent pattern of reactive and defensive decision-making, with key changes occurring only after legal setbacks, public criticism or clear indications of an impending proxy contest.”

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Glass Lewis also said Parkland has “significantly underperformed” its peers and that stronger independent board oversight is necessary.

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But it said a wholesale replacement of the board isn’t “warranted or advisable” and the company benefits from experienced and qualified management board nominees.

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“We believe our recommended seven-six board split, in favour of the dissident nominees, introduces a broad range of operational, financial, capital markets and governance expertise, while preserving appropriate institutional knowledge and stability, as well as limiting direct Simpson Group representation to a single investment manager,” Glass Lewis said.

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In a press release Monday, Simpson said only the election of all nine of its nominees can deliver the accountability shareholders deserve, but it was happy Glass Lewis affirmed its case for change.

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Cayman Islands-based Simpson, which holds an almost 20 per cent stake in Parkland, has raised concerns about the company’s governance and performance for about a year.

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Simpson and another activist investor, Engine Capital, had urged Parkland to weigh strategic alternatives to boost shareholder returns, which could include selling the whole company. Parkland resisted until early last month when it said a committee would look into possible deals.

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Earlier this month, longtime Parkland CEO Bob Espey announced plans to step down before year-end. Simpson and another activist investor, New York’s Engine Capital, had been pushing for change at the top.

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Parkland shareholders are to vote in the new board at its annual meeting on May 6.

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This report by The Canadian Press was first published April 28, 2025.

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Companies in this story: (TSX: PKI)

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