Dive Brief:
- One of Casey’s General Stores shareholders is proposing a policy that, if approved, would remove Darren Rebelez as board chairman, according to the c-store retailer’s 2024 Proxy statement.
- The shareholder, The Accountability Board (TAB), believes Casey’s board chairman should be an independent director — someone not employed by the company — moving forward. Rebelez, who became chairman last summer, has been president and CEO of Casey’s since 2019.
- Stockholders will vote on the policy at the company’s annual shareholder meeting Aug. 28. Casey’s board has recommended that stockholders vote against the proposal for several reasons, while TAB claims the current combined CEO/chair structure “can weaken a corporation’s governance and harm shareholder value.”
Dive Insight:
In its proposal to Casey’s shareholders, TAB argues that “a lack of checks and balances may arise when the board is chaired by executive management,” since management’s role is to run the company and the chairman’s role is to oversee management.
“Ultimately, a company’s CEO reports, and is responsible, to the Board — so we think an insurmountable conflict arises when a CEO is also Chair of the Board and thus, is his or her own boss,” Matt Prescott, president and chief operating officer for TAB, said in a statement to C-Store Dive.
Casey’s noted in its Proxy report that its results with Rebelez as CEO and chairman “contradict” TAB’s sentiment that its current board structure can harm shareholder value. The company pointed to its latest year of earnings, when it exceeded $1 billion in EBITDA for the first time in its history and added over 150 c-stores to its network.
Additionally, Casey’s emphasized that whenever its board chair is someone from within the company, it always appoints a lead independent director. That’s currently Judy A. Schmeling, who took on the role last summer, when Rebelez took the chairman role.
Although this is the first time Casey’s has received this proposal — as confirmed by a company spokesperson — this type of request isn’t uncommon for public companies. Shareholder proposals calling for an independent board chair rose by 113% in the Russell 3000 stock market index in the first half of 2023 — the highest level over the past decade, according to a report from Harvard Law.
Seven & i, parent company of 7-Eleven, made the move earlier this year, when Stephen Hayes Dacus took over as board chair from CEO and president Ryuichi Isaka.
Prescott noted that other large companies such as Boeing, Staples and Rite Aid have undergone this change over the past decade. Additionally, so far this year, TAB has filed similar proposals at several other firms, such as Target, Mondelez and Kellanova, formerly known as Kellogg’s. None of those proposals passed, but all received at least 30% shareholder approval, Prescott noted.
“We do believe other Casey’s shareholders want the company to improve its governance by adopting an independent Chair policy, which is why we filed this proposal,” Prescott said. “And just how many feel that way is exactly what the proposal aims to find out.”
