A dissident seeking board seats at Diamond Hill Investment Group Inc. fell millions of shares short of success at the company’s annual shareholders’ meeting Thursday.
Cedar Creek Partners LLC, a hedge fund investor in Diamond Hill, had nominated three candidates to fill director seats at the Columbus investment manager. Tim Eriksen, a principal in Lynden, Wash.-based Cedar Creek and one of the board nominees, said in his solicitation for votes that he supported boosting the company’s profit margin by reducing compensation levels.
Eriksen, whose firm held 1,503 shares when it filed its proposal in early May, received 8,414 votes. The seven board members proposed by Diamond Hill each received more than 2.2 million votes each, giving them the seats by a wide margin. Eriksen was present at the meeting and said he was disappointed that more institutional investors didn’t vote with him, but also attributed a lack of votes to not having enough time to reach out to shareholders before the meeting.
Although Eriksen’s effort to gain a board seat failed, Diamond Hill’s executives and directors did devote a significant portion of their comments and presentation to explaining their reasons for adding staff and providing incentives – moves that have grown compensation costs. Eriksen said he was encouraged by the company’s receptiveness to his concerns. Over the past few years, Eriksen said, he felt an antagonistic relationship had developed with the company, but that seemed to shift this year.
“Both sides realize each has good intentions,” he said, “but just different perspectives.”
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