GMP Mails Letter to Common Shareholders, Publishes New Q&A and Provides Confirmation on Board Independence
12. If the RGMP Transaction doesn’t proceed how will Richardson GMP be governed?
Richardson GMP will be governed by a Board of seven directors, of which two are nominated by GMP, two are nominated by Richardson Financial Group Limited, and two represent IAs. The remaining director is Richardson GMP’s CEO. This composition of this board is likely going to result in deadlock or present a challenge to GMP representatives in the event the RGMP Transaction is not approved and/or the dissident’s nominees are elected to the GMP Board.
13. Why do some of GMP’s directors not own shares?
All GMP directors are common shareholders except for the two most recent incumbents, who will be required to purchase shares under GMP’s minimum share ownership policy but have been legally prevented from doing so because negotiations for the RGMP Transaction have been underway since they joined the Board in 2018.
It reflects poorly on the dissident that he attempted to score points about GMP director share ownership while neglecting to mention that all directors were restricted by a trading blackout. The dissident was fully aware of it, having served on the Board when the most recent incumbents joined and for more than a year with them afterwards, while the blackout was always in effect.
Notably, a dissident nominee was once a shareholder but owns no shares now. In contrast, no GMP directors or nominees have ever sold down their ownership positions in GMP shares, never mind sold them all.
14. Why appoint RBC as financial advisor, given their historical relationship with the Richardson group?
RBC is a leading financial institution with deep experience in these specific areas. The Special Committee interviewed several firms for the role of financial advisor and chose RBC based on its depth of this experience and expertise. The Richardson family played no role in that decision.
Further, we think it is absurd to assert a potential conflict based on a transaction completed a quarter century ago, and to suggest that this would influence the independence of Canada’s largest financial institution.