CommonWealth REIT (NYSE: CWH) (“CommonWealth” or the “Company”) today announced that it has filed preliminary consent revocation materials with the Securities and Exchange Commission (the “SEC”) in response to the preliminary solicitation materials filed on December 3, 2013 by Corvex Management LP and Related Fund Management, LLC (“Corvex/Related”).
The CommonWealth Board believes that a wholesale removal, without cause, of all the members of the Board is not in the best interest of the Company and its shareholders, and would be disruptive to CommonWealth’s business and a value destructive exercise.
The Board and management team are committed to executing on the current business plan to increase value for all shareholders by repositioning the Company’s portfolio towards high value office buildings located in urban and downtown locations and disposing of suburban properties and other non-core assets. Despite the disruption that Corvex/Related has caused to CommonWealth’s business and operations for the last ten months, the Company has made significant progress implementing this plan during the last year, including:
- Approving plans to sell 85 properties (204 buildings), most of which are industrial and suburban office properties; and
- Selling 38 of these properties (92 buildings since the beginning of 2013, with additional sales expected in the coming months.
The Board is also pursuing a number of significant changes to its governance and management compensation based on direct input from shareholders, including:
- Adding additional Independent Trustees to the Board;
- Appointing a Lead Independent Trustee;
- Declassifying the Board;
- Terminating the “poison pill”; and
Restructuring the business management fee payable to the Company’s
manager, Reit Management & Research LLC (“RMR”), so that management’s
compensation is further aligned with the interests of shareholders.
Specific changes include:
- The base management fee includes a market capitalization component;
- The base management fee is payable partially in Company common shares, instead of all cash;
- The incentive management fee includes a shareholder return component;
- The incentive fee is payable entirely in Company common shares; and
- The incentive fee has a “clawback” and five-year vesting.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV