Charlotte's Web Rejects Call to Replace Four Directors
10:26 am ET June 13, 2023 (Dow Jones) Print
By Robb M. Stewart
Charlotte's Web's board has rejected a call by two of the hemp-extract products company's founders to replace four directors, including the chairman and chief executive.
The Denver-based company said Tuesday its board doesn't intend to "abrogate its fiduciary responsibilities to shareholders" by helping with the removal of three independent directors in favor of non-independents.
The company said it and the board will comply with all legal requirements and appropriate protocols, as well as Toronto Stock Exchange and shareholder-approved policies, in connection with the election and appointment of any board members.
Jesse and Joel Stanley, two of the brothers who founded the hemp health-supplements company, in a letter to the board late last week called for votes to be withheld for four of the six directors nominated by the company, including Chairman and independent director John Held and CEO Jacques Tortoroli, and directors Thomas Lardieri and Alicia Morga.
The Stanley brothers have put themselves, along with Lynn Kehler and Angela McElwee, as alternative directors. The brothers said they and supporting shareholders together represent almost 25% of the Charlotte's Web shares entitled to vote at the annual meeting set for June 15.
Charlotte's Web said there are ongoing business relationships between the companies and entities in which Joel and/or Jesse Stanley hold direct or indirect interests, certain of which are or will be subject to board review and approval in the near future.
The brothers said Charlotte's Web's board has declined to meet with them, and has instead told them to talk to the company's lawyers.
"The board needs to return to a founder's mentality, end wasteful spending and assemble a team that knows what it takes to grow the company," said Joel Stanley, who was the company's first chief executive.
The brothers in a statement issued earlier this week said Charlotte's Web's share price has fallen sharply since Joel Stanley left its board in March 2021, revenue has declined and the value of the company is at its lowest levels since going public.
Charlotte's Web said that Institutional Shareholder Services and Glass Lewis have recommend shareholders vote for each of the company's board nominees at the upcoming annual meeting.
In morning trading, the Toronto-listed company's shares were 1.7% lower at C$0.28, down more than 60% so far this year and 50% weaker over the last 12 months.
