Dive Brief:
- Ingles Markets shareholders have elected Rory Held, a representative of an outside investment firm who drew strong opposition from the company, to the grocer’s board of directors.
- Held is the chief investment officer of Summer Road, a firm that makes investments on behalf of the Sackler family, which formerly owned opioid maker Purdue Pharma.
- Ingles had urged investors to reject Held’s nomination, arguing that his connection with the Sacklers would tarnish the company’s image and could lead to a boycott.
Dive Insight:
Ingles focused its efforts to keep Held off of its board on its contention that Summer Road’s association with the Sackler family would harm the company because of Purdue Pharma’s role in the opioid crisis. But shareholders were not swayed by that argument.
Shareholders also elected Dwight Jacobs to Ingles’ board as a Class A director, according to preliminary voting results from the grocer’s annual meeting Thursday morning. Jacobs was one of two nominees the company had urged shareholders to vote for. Rebekah Lowe, the other nominee, was not elected.
“Today’s election represents a clear mandate from Class A shareholders that change is needed at Ingles,” Held said in a statement. “I am now fully focused on putting the proxy contest behind me and working collaboratively together with the other members of the Ingles Board to improve the Company’s transparency and instill better oversight of capital allocation.”
Ingles’ board did not comment directly about Held or Summer Road in a statement following the vote.
“We appreciate the engagement and input we’ve received from our shareholders leading up to the Annual Meeting. The Ingles Board and management team remain committed to serving the best interests of all Ingles stakeholders, including our shareholders, associates and the communities we serve, as we build on more than 60 years of success as a leading southeastern supermarket chain,” Ingles’ board said in the statement.
The decision by Ingles’ shareholders to add Held to the supermarket operator’s board caps a weekslong battle between the company and Summer Road that saw both sides accuse each other of attempting to mislead investors.
Summer Road claimed that Ingles, which runs almost 200 grocery stores in six Southeastern states, has not provided clear information to investors about its business. Summer Road, which says it owns about 3% of the outstanding shares of Ingles’ Class A common stock, also said Ingles has underperformed compared with other publicly traded grocery companies and the broader stock market.
Ingles countered that its shareholder returns in recent years have “meaningfully outperformed” those of companies with relatively small market capitalizations. The grocer added that it has also done better than “relevant grocery peers.”
Ingles added earlier this month during an investor presentation that it “is prudently investing to generate continued profitable growth and operating efficiencies” and that “day-to-day operations are just one driver of success.”
Summer Road and Ingles also sparred over how the grocer, which runs almost 200 grocery stores in six Southeastern states, has deployed property it owns.
The investment firm said Ingles has not effectively used its land, which includes the property on which most of its stores sit as well as substantial amounts of undeveloped land. Ingles responded that undeveloped land “is strategically important to our long-term growth,” adding that Summer Road’s claims illustrate that it has a “total lack of understanding of Ingles’ real estate holdings.”
