Aug 27, 2013
Big Lots has taken the unusual step of overturning a majority vote by shareholders by reappointing Russell Solt to its board of directors.
While uncommon, the action does follow Big Lots’ corporate-governance guidelines, said Chad Reynolds, vice president and deputy general counsel at the Columbus-based closeout retailer.
“Mr. Solt received just over 48 percent of votes, but no successor was elected,” Reynolds said. “ In accordance with our corporate-governance guidelines, he tendered his resignation.
“Our governance guidelines then provide for a deliberation process where the nominating and corporate-governance committee makes a recommendation to the board, and the board then decides what to do.”
The move to overturn the majority vote of shareholders is unusual among local companies, said Eleanor Bloxham, a Westerville-based corporate-governance expert.
“This doesn’t make shareholders happy,” she said. “They have gone to the trouble of getting the majority to vote no, so who knows what they’re (the company and board) in for next year from shareholders. It really does raise the ire of shareholders when a board doesn’t take action.”
The board reached out to various shareholders to find out why Solt had not been re-elected and found that the vote had been related to complaints about executive pay at the company, Reynolds said. The vote wasn’t directed personally at Solt, a veteran retail executive who previously has served as CFO of Williams-Sonoma and of discount retailer Venture Stores.
“What we heard was, ‘Fix the underlying issue,’ ” Reynolds said, “and that’s what Mr. Solt and the board have been doing.”
At Big Lots’ annual shareholders meeting in May, the company made several changes in its corporate-governance practices. The biggest changes included reducing the overall compensation package for the CEO; changing the way in which new CEO David Campisi is paid; focusing more on shareholder return; and appointing separate executives to serve as chairman and as CEO.
In view of those changes, the board decided that the underlying issues had been resolved and therefore asked Solt to return, not only to the board of directors but also as chairman of the compensation committee, Reynolds said. Solt’s term will continue until the company’s 2014 annual meeting.