Sandell Presents Case Against Ethan Allen Governance

November 4, 2015  by in Financial Reports, Industry   

Sandell, a major shareholder in Ethan Allen, is in a proxy battle with the home furnishings company.

The presentation entitled “Re-Design Ethan Allen: The Case, Candidates and Plan for Change” discusses issues Sandell says have plagued Ethan Allen tracing back to poor corporate governance. Sandell is a major shareholder.

Sandell believes Ethan Allen’s approach to merchandising, and its fiscal and real estate policies have impacted the company through an outdated model that has been enabled by the board of directors. 

The presentation argues that the company’s recent addition of two new directors is a transparent and cynical gesture with no practical impact on policy. It also points out as notable that Farooq Kathwari, chairman, CEO and president of Ethan Allen, was granted a new five-year employment agreement soon after the addition of the new directors. 

Sandell has nominated its own slate of candidates for the board of directors. Its plan would also contemplate changes across retailing, finance and governance of Ethan Allen. The Sandell presentation is available online.