MONTREAL--(BUSINESS WIRE)--The Lumber Liquidators Value Committee (LLVC) recommends that shareholders vote AGAINST all management proposals to be tabled at the Lumber Liquidators (NYSE: LL) Annual Shareholder Meeting on May 22, 2019.
LLVC believes that the magnitude of value destruction, anemic recovery and management's self-enriching mindset as evidenced by its large pay packages necessitates a change at the company.
Non Shareholder-Friendly Proposals
- In 2018, CEO Dennis Knowles received a 7.41% increase to his base salary for "merit." Mr. Knowles also received equity grants valued at $1,250,000. His total compensation for the year was over $2.3 million. This hardly seems appropriate considering that Lumber Liquidators' stock collapsed almost 70% in 2018 and the company lost over $54 million. For 2019, the company has doubled the Bonus payout rate for the lowest level of performance (threshold level), thereby further rewarding and incentivizing mediocre performance. Shareholders must vote AGAINST the executive compensation plan (Proposal 3) in order to stop extravagant salary increases.
- Furthermore, the Board of Directors wants to increase the number of shares of common stock authorized for issuance by 1,750,000 in order to grant still higher equity-based compensation awards. Due to the low stock price, management has been issuing increasingly higher levels of stock-based compensation. Shareholders must vote AGAINST the amended equity compensation plan (Proposal 4) in order to stop the dilution of their holdings.
Enough is Enough
LLVC intends to release a detailed operational plan designed to rapidly and cost effectively drive growth and increase margins at Lumber Liquidators. Concurrently we will insist that the Board of Directors conduct a strategic review to gauge interest for either a strategic or financial buyer to take over the company, should the premium be substantially beneficial to shareholders. LLVC has communicated with several large shareholders and received strong support for our strategy and anticipated proxy fight. More details can be found at http://rebuildll.rizzicapital.com/
About The Lumber Liquidators Value Committee (LLVC)
LLVC is a coalition of value oriented investors with a sizable stake in Lumber Liquidators. We believe that with a clear plan and effective leadership, Lumber Liquidators can once again become a great and prosperous corporation. The committee is led by Mario Rizzi, a Montreal, Canada, based activist investor with 20 years of investment experience. LLVC is open to all Lumber Liquidators shareholders.