Former Gildan Activewear Inc. president and CEO Glenn Chamandy after the apparel manufacturer's annual meeting on Feb. 5, 2015 in Montreal.Paul Chiasson
Gildan Activewear Inc. co-founder Glenn Chamandy says he had no plans to leave his job as the clothing maker’s chief executive and that the board of directors’ decision to dump him earlier this week is the result of a “failed process” that blindsided investors. A shareholder revolt is now brewing to try to get him reinstated.
“I’m very angry with the way they handled me, to be honest with you,” Mr. Chamandy said in an interview with The Globe and Mail Friday. “I had no intention of leaving. You know, my view is that I would leave when I think the time is right for the company.”
Mr. Chamandy said Gildan’s board did succession planning as part of its regular business, but there was never any real move to explore changing CEOs until this past summer, when he was told the board would look for outside candidates to replace him. He says he took exception to that, telling directors he should be part of any succession process in due course, and he later declined to co-operate because he didn’t believe it was the right time for a CEO switch.
“I said, ‘I just don’t think it’s a great idea,’” said Mr. Chamandy, whose family founded Gildan. “And I told them that if they basically go down this path, they can terminate my contract without cause.”
Gildan did just that. The T-shirt and sock maker shocked financial markets Monday when it said that it had dismissed Mr. Chamandy after a 40-year tenure at the company, the past 20 years as CEO. It named former Fruit of the Loom executive Vince Tyra as his replacement. Mr. Tyra is scheduled to start in February.
In an interview with The Globe on Monday, Gildan chairman Donald Berg said there was a disagreement with Mr. Chamandy over the timing of a leadership handover. Mr. Chamandy wanted a longer process while the board’s timeline was shorter, Mr. Berg said.
“It was our view that as you thought further out for the company, it was time that whoever was going to have to live with those decisions should be making those decisions,” he told The Globe. He said a CEO change makes sense now because the company is performing well.
Mr. Chamandy said there was no urgency for any leadership change and the board should have stuck with a proven and steady hand at a time when the company is expanding its manufacturing footprint and the macroeconomic picture remains challenging. He said the succession process lacked transparency and failed to engage shareholders.
“You just don’t pull the wool over everybody’s eyes and all of a sudden say, ‘Hey, by the way, we’re changing the guy that’s run the company so successfully and we’re not telling you about it,’” Mr. Chamandy said. “This is a failed process basically because they actually didn’t think it through.”
Earlier Friday, Jarislowsky Fraser Ltd. called on Gildan’s board to reinstate Mr. Chamandy as CEO. The Montreal-based investment management firm, believed to be Gildan’s biggest shareholder, holds a 6.9-per-cent stake in the company, a Jarislowsky spokesperson said.
Jarislowsky’s intervention brings to at least four the number of Gildan’s shareholders that have publicly voiced their opposition to the CEO switch and ratchets up the pressure on the board to reconsider its decision or risk a conflict with major shareholders. At least one of them has vowed to apply for a special shareholders meeting to reconstitute the board if it doesn’t act urgently.
The other top 10 shareholders that have gone public urging the reinstatement of Mr. Chamandy are New York-based Pzena Investment Management, Los Angeles-based hedge fund Browning West and Toronto-based investment management firm Turtle Creek Asset Management. Mr. Chamandy said he’d consider a return if asked.
Gildan spokesperson Geneviève Gosselin did not respond to a request for comment Friday.
In an e-mailed statement, Charles Nadim, Jarislowsky Fraser’s head of research, said the board made a mistake in ending Mr. Chamandy’s employment. He called for Mr. Berg to resign.
“The abrupt termination of Mr. Chamandy at age 61 to bring on a 58-year-old executive to lead the company into the next stage of its evolution and growth is concerning,” Mr. Nadim said. Mr. Chamandy needs to return as CEO in order to “mentor internal candidates as part of a thorough succession plan culminating in an orderly transition of leadership,” he said.
Mr. Nadim praised Mr. Chamandy for his track record leading Gildan, saying his presence is “critical” while the company carries out an expansion and innovation program. Mr. Tyra lacks the relevant manufacturing expertise to be Gildan’s CEO, Mr. Nadim said, and the board’s decision “lacked sufficient due diligence” when assessing Mr. Tyra’s performance record.