Magna Investors Seek to Kick Founder Off Board

Frank Stronach, the founder and former chairman of Canada's Magna International Inc., faces a re-election battle on Thursday at the company's annual meeting.

The influential Ontario Teachers' Pension Plan and proxy advisory firm Glass Lewis are urging Magna shareholders not to vote for Stronach. New rules this year require board candidates to receive at least 50% of the shareholder votes cast to be elected.

The pension fund and Glass Lewis contend Stronach and the board breached their duty to shareholders when they agreed to pay US$1 billion to the Stronach family to surrender voting control of the company in 2010. The fund which tried unsuccessfully to block the deal in court opposes the re-election of all directors who were on the board at that time.

At last year's meeting, the three directors who negotiated the Stronach deal received only 38% of the votes cast. But Magna didn't reveal the voting results until December under legal pressure from three institutional investors. Those three directors are still on the board but agreed not to seek re-election.

The board also faces opposition from investors who are unhappy that the board last year allowed the sale of five properties at a loss to affiliates of Stronach and former co-CEO Siegfried Wolf.