LONDON (Reuters) - Shareholder advisory firm Glass Lewis has recommended LSE shareholders vote against a resolution by activist hedge fund TCI calling for the immediate removal of chairman Donald Brydon, it said on Thursday.
The LSE and TCI have been engaged in a public tussle over the exchange’s handling of plans for Chief Executive Xavier Rolet to step down by the end of 2018.
TCI, which has a 5 percent stake in the LSE, had accused the board of forcing Rolet out and instead demanded a meeting to remove Brydon.
Glass Lewis is the second influential investor advisory group to recommend investors reject TCI’s proposals after ISS made a similar statement on Wednesday.
“We see no reason to believe that the board failed to properly oversee the company during the CEO transition process or that it failed to act in the best interest of shareholders,” Glass Lewis said.
“We find little evidence to support the ... claims that shareholders have lost faith in Mr Brydon as chairman,” it added.
The shareholder meeting will take place at 1200 GMT on Dec. 19.
A source close to TCI said the hedge fund, founded by Christopher Hohn, always expected ISS and Glass Lewis would not support them due to their corporate governance rules.
The source did not expect TCI to gain sufficient backing from other shareholders to win the vote, but said it could get enough support to force Brydon out anyway.
“I think a bunch of people are humming and hawing because they’re afraid it will create more problems rather than less,” said the source.
TCI and LSE declined to comment on the Glass Lewis statement.
The LSE board last week said it recommended shareholders reject TCI’s resolution.
Reporting by Ben Martin, Carolyn Cohn and Maiya Keidan; editing by Anjuli Davies and Adrian Croft