LONDON (Reuters) - A leading shareholder in London-listed technology company Telit Communications (TELT.L) has called a general shareholder meeting to try and remove CEO Yosi Fait and another director from the board, after the award of a bumper share option payout.
Telit announced on July 16 that it had awarded options totalling 4,785,000 shares in the company to certain board directors, senior management and employees “to incentivise and retain key individuals”.
However, activist hedge fund manager Davide Serra, the company’s fourth-biggest investor according to Thomson Reuters data, said the plan would “destroy shareholder value”, according to a letter sent to the board on Thursday evening and seen by Reuters.
“Never have I witnessed a share option plan of this size being launched by a company undergoing fundamental operational and governance restructuring and within nine months from the award of another very generous share-based incentivising plan,” the letter said.
Telit Communications said in a statement on Friday that it had received a letter from Serra to convene a general meeting to remove Fait and Duffy as directors of the company and appoint four new board members.
“Further announcements will be made in due course,” said the statement.
Serra, who personally holds a 6.1 percent stake in Telit, said he was proposing resolutions to remove Chief Executive Officer Fait from his director role and Simon Duffy, board chairman at the time of approval of the plan, at the general meeting and elect four new independent directors.
His candidates comprised Adam Power whom he said had a successful track record in global management in online, media TV and technology, Finland’s former minister of communications Suvi Linden, Jonny Bourne, most recently Chief Operating Officer of Trinity College, Cambridge, and Chairman and Director of Aava Mobile Oy Anders Torstensson.
“I believe that the... resolutions will strengthen Telit governance and align the interests of the management team to those of shareholders,” he said in the letter.
Reporting by Maiya Keidan; Editing by Emelia Sithole-Matarise