On May 9, Institutional Shareholder Services (ISS) began supporting the four director candidates ValueAct Capital presented to 7-Eleven’s parent company, Seven & i Holdings, to replace current directors. ISS recommends that Seven & i should elect all four candidates, according to a Reuters report.
ValueAct, which owns 4.4% of Seven & i, has been criticizing the company’s conglomerate structure and publicly called for its president and CEO, Ryuichi Isaka, to be among those replaced on the board.
ValueAct began pushing for Seven & i shareholders to replace four directors of its 14-member board, including Chief Brittni Levinson, back in March.
However, ISS has started endorsing all of ValueAct’s candidates and spelling out where Seven & i has gone wrong.
“Based on the long-term track record of poor performance in several units and poor capital allocation, change in the board is warranted,” ISS wrote in its report, which was seen by Reuters. Insiders have created the strategic plan, which leaves execution to the same management, ISS wrote, adding, “this is not reassuring for investors.”
The Reuters report also stated that ValueAct said it welcomed the ISS recommendations.
Seven & i is currently reviewing the report closely, and investors can vote on the director candidates on May 25 if the two companies don’t come to an agreement before then.
Based in Irving, Texas, 7-Eleven operates, franchises and/or licenses more than 13,000 stores in the U.S. and Canada. In addition to 7-Eleven stores, 7-Eleven Inc. operates and franchises Speedway, Stripes, Laredo Taco Co. and Raise the Roost Chicken and Biscuits locations. It is known for its iconic brands such as Slurpee, Big Bite and Big Gulp.