Farmer Bros. board nominees survived a fierce proxy fight led by family members unhappy with management and the firm’s recent move from California to Texas.
Stockholders led by Carol Farmer Waite organized Save Farmer Bros (www.savefarmerbros.com) and financed the proxy fight asserting “the business has lost its way under its current leadership.”
“We are no longer willing to stand idly by as the board and management fail to address our significant concerns,” wrote Waite, who hoped to oust senior management for its “inability to instill a positive corporate culture or improve sinking employee morale.” She also questioned the board’s corporate governance. “The vast majority of FARM’s talented and dedicated employees would welcome a change in the toxic tone at the top,” she wrote in a letter to stockholders.
Institutional Shareholder Services and two other independent proxy advisory firms recommended stockholders reject Waite’s three board candidates.
“Management is responsible for a proven turnaround plant that has returned Farmer Bros. to profitability,” according to board chairman Randy Clark.
The stock price is up 225% and valued at $400 million since Farmer’s c.e.o. Mike Keown took over. In a letter to stockholders he noted coffee volume was up 8.1% to 91 million pounds. Gross profits were $197 million in fiscal year 2015.
The move to Ft. Worth, Tex. will save an estimated $18-20 million a year, according to Clark, who vigorously opposed the Save Farmer Bros. slate.