A vocal critic of Brookdale Senior Living is being nominated for a position on the company’s board, according to a filing with the Securities and Exchange Commission.
Stamford, CT-based registered investment manager Land & Buildings, a Brookdale shareholder, is nominating its founder and chief investment officer, Jonathan Litt, along with James F. Flaherty III, who is the former chairman and CEO of real estate investment trust HCP and former vice chairman and board member of NorthStar Healthcare Income.
Brookdale, in a July 3 SEC filing, said the Nominating and Corporate Governance Committee of its board “will evaluate Land & Buildings’ nominees and make a recommendation to the Board of Directors in due course.”
Litt previously has called for Brookdale to divide its properties between a real estate investment trust and an operating company, or sell its owned real estate or the entire company, among other actions, to maximize shareholder value. Last year, Land & Buildings said it would vote against the three directors up for election at Brookdale’s annual meeting, but the nominees subsequently were elected.
Litt also previously called for an accelerated schedule to de-stagger board member elections. An amendment to the Brookdale’s articles of incorporation or bylaws subsequently passed at the 2018 annual meeting and will phase out staggered annual elections to three-year terms; beginning with the 2021 annual meeting, Brookdale will hold annual elections of all directors. Litt had wanted the change to occur earlier, however.
In 2017, Brookdale and Land & Buildings struck an agreement that added Marc Bromley to Brookdale’s board as an independent member. Also under the terms of the agreement, Land & Buildings agreed to support the slate of director nominees put forth by Brookdale’s board at the 2017 annual meeting, and Brookdale said it would consult with Land & Buildings about the board’s composition before the 2018 meeting.
The 2019 elections will occur at Brookdale’s annual meeting, for which a date has not been announced. Two board members, James Seward and Jackie Clegg, already have announced that they will not seek re-election. Clegg is the board’s longest-serving member, having joined the board in 2005. Seward has been a board member since 2008.
In a public letter in August, Litt described Clegg as having “a dated knowledge of best corporate governance practices as well as a strong bias for entrenchment.” He recommended that the board “reevaluate her inclusion on any committees” and not re-nominate her at the company’s 2019 annual shareholder meeting because she has “overseen material shareholder value destruction at Brookdale.”
