Summary
- The Proxy Vote For Proposal #4 Passed By A Slim Margin.
- Votes Against and Abstentions Are at Record Highs.
- LLVC Demands 2 Director Seats to Refresh The Board.
The Lumber Liquidators (LL) Annual Shareholder Meeting was held on May 22, 2019. There were 4 proposals up for vote. As I have stressed in my various articles, these proposals were unfavorable to shareholders and I actively recommended that all LL shareholders vote against them. Of special note was Proposal #4, which would dilute the share base by over 6% in order to give more stock based compensation to management and the board.
The votes have been tabulated. All of management's proposals passed, but Proposal #4 was ratified by a very slim margin.
Poor Support For Proposal #4
Proposal #4 Equity Compensation Plan (Source)
| Votes For | Votes Against |
| 7,487,860 | 6,128,179 |
Fundamentally, if only 680k votes (2.4% of outstanding shares) had swung from voting "Yes" on Prop #4 to voting "No", the proposal would have failed. Looking at the results further, out of the 28.6 million outstanding shares in the company, only about 1/4 voted for Proposal #4. It's a victory for the Board, but it's hardly decisive.
Despite losing this battle, we consider the effort to make changes at the Board and management level well on track. So far, using minimal effort, my group has been able to generate a huge amount of interest in our plan to turn this company around. Holders of the 6.1 million shares which were voted against Proposal #4 recognized the egregious nature of the proposal. The Lumber Liquidators Value Committee (LLVC) played a central role in bringing awareness to its many flaws.
