Cardinal Capital Management Joins Other Shareholders in Call for Reinstatement of Glenn Chamandy as CEO of Gildan Activewear

WINNIPEG, MB, Dec. 21, 2023 /CNW/ - Cardinal Capital Management has sent the following letter to the board of directors of Gildan Activewear.

December 21, 2023

To the Board of Directors of Gildan Activewear Inc.,

As a significant shareholder of Gildan with ownership of nearly two per cent of the company's common shares, we at Cardinal Capital Management request that Glenn Chamandy be reinstated as CEO. 

Gildan has been a dominant company in the apparel manufacturing industry, consistently gaining market share from competitors while operating with lower costs and higher margins than its peers.

In recent shareholder presentations, management's plan was presented as more of the same – a new plant in Bangladesh would increase capacity, operating margins were on the rise and share buybacks and dividends were planned for excess free cash flow. Shareholders endorsed this plan as shown by strong recent gains in the share price.

We were shocked by the board's decision to terminate Chamandy's employment contract. We are concerned with the credibility of the board's narrative, which focused first on succession and then shifted to a risky acquisition allegedly proposed by the CEO. Neither of these reasons are typical for the dismissal of a successful CEO who wants to stay with the company.

We question the succession plan of hiring a new CEO who is only a few years younger than Chamandy and whether the alleged acquisition could have simply been voted down, a far less dramatic option than relieving the CEO of his duties.

We are also disappointed with the sudden appointment of a Gildan board seat to a managing partner of Coliseum Capital Management, in what appears to be a move to diminish the rights of shareholders. Specifically, we disagree that there should be a condition for Coliseum to vote with the board on nominations at the annual general meetings in both 2024 and 2025, despite not knowing with certainty who the nominees will be.

In just over a week since the announcement of Chamandy's termination, an unprecedented 35% of company shareholders have now publicly stated their desire to reinstate him, compared to just six per cent (Coliseum) who support the board's decision.  Put another way, over 85 per cent of the shareholders who have gone public with their views want Chamandy reinstated as CEO, making his appointment as CEO a near certainty should a special shareholder vote be called.

In light of this strong support, and to avoid further distraction for Gildan, we ask the board to reinstate Chamandy as CEO immediately.

Sincerely,

Evan Mancer
President, Cardinal Capital Management

SOURCE Cardinal Capital Management, Inc.