Shareholders elect Schweitzer to Stillwater Mining Co. board

2013-05-02T22:00:00Z 2014-08-04T19:08:58Z Shareholders elect Schweitzer to Stillwater Mining Co. boardThe Associated Press The Associated Press
May 02, 2013 10:00 pm  • 

NYE – Shareholders of Montana’s largest public company on Thursday elected former Gov. Brian Schweitzer and three other dissident investors to Stillwater Mining Co.’s board of directors after alleging mismanagement by the current board.

But the shareholders also re-elected four current board members, including CEO Frank McAllister, meaning the two sides will have even numbers and will have to work together.

Schweitzer and the Clinton Group, a New York hedge fund, charge that mismanagement by McAllister and the company’s board has put more than 1,600 Stillwater jobs at risk.

McAllister counters that the dissidents wanted to take over the company on the cheap as it’s poised to expand production at its platinum and palladium mines in the Beartooth Mountains north of Yellowstone National Park.

The maneuvering for votes has been reminiscent of a political election, complete with dueling public relations campaigns. For Schweitzer, it could be a prelude to a possible run to replace U.S. Sen. Max Baucus, a fellow Democrat who announced last month he’s stepping down in 2014 after six terms.

Schweitzer said after the vote, which still must be certified, that electing four members of the dissident group was a “huge victory.”

Earlier, Schweitzer’s side rejected a proposed settlement to split the board evenly and avoid a vote. The former governor said before the vote that nothing short of McAllister’s ouster would be acceptable for his side.

An evenly split board would offer “the worst governance you could imagine,” he said then.

But with the shareholder vote effectively producing the same result, Schweitzer said afterward that he is willing to work with the directors for the good of the company.

One point of contention between the two sides is the company’s 2011 decision to pay $450 million for a vast reserve of copper in Argentina, which has been panned by some Stillwater investors because of political uncertainty in the country and the billions of dollars that would be needed to build a mine.

McAllister said the message from shareholders was clear: They want the company to stay focused on its Montana platinum and palladium mines.

“The people who are now directors are people who are dedicated to keeping the mine open and safe, and stopping investments all over the world,” Schweitzer said. “The investments that have been made in foreign places, that’s history.”

McAllister will remain CEO for now but said he expects a transition to a new one in the future. He did not give a timeline for the change.

Besides Schweitzer, members of the dissident group elected include Patrice Merrin, Michael McMullen and former Stillwater CEO Charles Engles.

The current board members re-elected include McAllister, George Bee, Michael Parrett and Gary Sugar.

The Clinton Group controls roughly 1 percent of Stillwater stock. But its bid to oust a majority of Stillwater’s eight-member board was bolstered by support from two investment research firms, whose recommendations were expected to influence institutional investors with large enough stakes in the company to decide the matter.

Stillwater, with a market value of more than $1.3 billion, runs the only platinum and palladium mines in the United States. The company reported a net income of $43 million in 2012 based on revenue of $800 million.

Analyst John Bridges with JPMorgan Chase & Co., said before the vote that the best outcome for shareholders would be the re-election of at least some current board members, given their knowledge of precious metals mining.

Yet Bridges added that the company’s board and management should face “consequences” over the decision on the Argentina copper reserves. A second foreign acquisition, the Marathon palladium reserves in Ontario, is considered more promising.

“There have been mistakes at Stillwater, and there should be consequences,” Bridges said. “I’m scared by the concept of a whole new board having to come in and learn how to operate these difficult assets in Montana and learn the ins and outs of the palladium business.”

Stillwater shares climbed 23 cents, or 2 percent, to $12.05 Thursday before the voting results were announced.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(5) Comments

  1. Pogo
    Report Abuse
    Pogo - May 03, 2013 9:17 am
    "Paradise Lost"
    (Sung to the tune of "Paradise" by John Prine)

    When I was a child my family made a living
    in the Beartooth Mountains working the Stillwater Mine.
    They were prosperous days that are fondly remembered
    Good pay and good people not forgotten in time.

    And daddy, won't you take me back to Stillwater County
    Down by the Boulder River where Paradise lay?
    Well, I'm sorry, my son, but you're too late in asking
    Brian Schweitzer’s Eastern Hedge Fund hauled the jobs all away.

    The Montana Unions all stood with the miners
    Told the greedy Eastern scoundrels to just go away
    But Brian and Jag joined up with the Hedge Funds
    To carve up Montana for their big fat pay day.

    And daddy, won't you take me back to Stillwater County
    Down by the Boulder River where Paradise lay?
    Well, I'm sorry, my son, but you're too late in asking
    Brian Schweitzer’s Eastern Hedge Fund hauled the jobs all away.

    Then the big Eastern Hedge Funds brought in their accountants
    To sell off the assets which was always their plan.
    Then, they turned on the workers and Montana was forsaken
    Then they wrote it all down as the progress of man.

    And daddy, won't you take me back to Stillwater County
    Down by the Boulder River where Paradise lay?
    Well, I'm sorry, my son, but you're too late in asking
    Brian Schweitzer’s Eastern Hedge Fund hauled the jobs all away.

    When I die, let my ashes float down the Boulder River
    Let my soul roll up on the Yellowstone’s swell.
    I'll be halfway to Heaven with Paradise waitin'
    Brian Schweitzer and his Hedge Fund can all go straight to H*ll.

    And daddy, won't you take me back to Stillwater County
    Down by the Boulder River where Paradise lay?
    Well, I'm sorry, my son, but you're too late in asking
    Brian Schweitzer’s Eastern Hedge Fund hauled the jobs all away.
  2. montanamuralist
    Report Abuse
    montanamuralist - May 03, 2013 8:02 am
    Ok you got something done...now run for the Senate please Brian.
  3. Pistol
    Report Abuse
    Pistol - May 03, 2013 7:57 am
    First coal now palladium! He seems obsessed about minig! When he ran for governor, and in his first few years in office he traveled the state promoting coal useage and the revenue it could create for Montana. Then nothing! The enviros must have got to him, or aspiration of federal job. We all know OBama is anti coal! Hope he makes the mine work for Montana jobs. What does this do to his possible run for the US Senate? Can he be active in the business and be a US Senator?
  4. Run - A- Mook
    Report Abuse
    Run - A- Mook - May 02, 2013 10:50 pm
    Montana's drunk still came in 2nd.
  5. wjw33
    Report Abuse
    wjw33 - May 02, 2013 8:34 pm
    Dear Bri-Bri,
    You made it...be careful of what you ask for...
    When reviewing Argentina's domestic energy policy, one becomes skeptical of all Argentine investments.
    Regards,
    Citizen Mint Julep
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