NEW YORK Two proxy advisory firms offered a boost on Tuesday to the founder and former CEO of Cypress Semiconductor Corp., who is trying to replace two directors on the company’s board.
Institutional Shareholder Services (ISS) recommended that Cypress Semi stock owners withhold their support for the company’s lead independent director, Eric Benhamou.
Cypress Semi’s founder and former CEO T.J. Rodgers is running a proxy contest against the company, seeking to replace Benhamou and Executive Chairman Ray Bingham. Rodgers has nominated veteran tech industry board directors Daniel McCranie and Camillo Martino.
Glass Lewis, another proxy adviser, recommended shareholders vote for both McCranie and Martino. Cypress Semi’s annual shareholders meeting is scheduled for June 8.
ISS said Benhamou “appears to bear direct responsibility for the board’s suboptimal response to certain issues raised by the dissident, as well as for the company’s prolonged underperformance.”
ISS said in its report that shareholders need to consider the downside risk of Bingham’s removal from the board during the company’s early stages of a strategic transition. ISS noted that withholding votes from Benhamou would facilitate the election of Rodgers’ nominee McCranie.
Rodgers, who stepped down as CEO on April 28, is the company’s sixth-largest shareholder, with a 3.2 percent stake as of the last quarter.
The main target of Rodgers’ campaign is Bingham, who is the co-founder of China-backed private equity fund Canyon Bridge. Rodgers argues that Bingham’s involvement with Canyon Bridge puts him in a conflict as a Cypress Semi board member, because the fund may seek to acquire targets that overlap with the company’s own list of targets.
(Reporting by Michael Flaherty; Editing by Dan Grebler)