By Svea Herbst-Bayliss
(Reuters) -Institutional Shareholder Services, a proxy advisory firm, on Thursday threw its support behind Starbucks Corp by recommending that investors elect all of management’s directors instead of a group of labor unions’ nominees.
The Strategic Organizing Center (SOC), a coalition of North American labor unions, last year nominated three director candidates amid an ongoing battle between the coffee chain and its employees over pay, among other things.
“The dissident has not presented a compelling case for board-level change,” ISS wrote in its recommendation seen by Reuters.
Shareholders will cast their vote on March 13 unless the two sides reach an agreement beforehand.
This battle has been widely watched as SOC argued that the fight over unionization at the coffee chain hurt the company’s reputation and share price.
ISS disagrees, writing that while the company’s initial response to unionization efforts translated into reputational damage, “the dissident has failed to establish a material link between these matters and underperformance, undermining its request for over a quarter of the board’s seats.”
The proxy advisor, whose recommendations often guide big shareholders’ voting patterns, praised Starbucks’ board since the start of the fight, noting how it provided shareholders with
adequate disclosure.
It also noted that the company took “appropriate action to address certain of the issues impacting its partners.”
(Reporting by Svea Herbst-Bayliss; Editing by Leslie Adler and Nick Zieminski)
