Harvie named chairman of Cedar Fair, focus on higher distribution fails to pass
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[Ed. note: The following is an excerpt of a press release. -J]
Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced the appointment of C. Thomas (“Tom”) Harvie as non-executive, independent chairman of the Board of Directors, effective immediately.
Harvie succeeds Dick Kinzel as the Company’s chairman. Kinzel voluntarily relinquished his chairman position in response to unitholders’ support of the proposal regarding the separation of the chairman and chief executive roles. Kinzel will remain as president and chief executive officer of Cedar Fair through the end of his contract on January 3, 2012. The proposal passed with approximately 54 percent of the vote at the Special Meeting of Unitholders, held on January 11, 2011, to consider two amendments to the partnership agreement as proposed by Q Funding III, L.P. and Q4 Funding, L.P. (“Q Investments”). Given the complexity of voting tabulation caused by the two distinct sets of proxy materials used in such special meetings, the results required a verification and reconciliation process by an independent inspector of elections.
Harvie, who has served as an independent director of Cedar Fair since 2008, chairs the corporate governance committee and the CEO succession planning committee. Most recently, Harvie served as senior vice president, general counsel and secretary for The Goodyear Tire & Rubber Company.
Harvie’s appointment is in line with the Board’s newly adopted policy, which requires the separation of the chairman and chief executive officer roles and states that the chairman of the Board will be independent of the Company.
Harvie commented, “We believe today’s actions will help ensure a smooth and seamless leadership transition for Cedar Fair as it enters a new era of growth and sustained value creation for its unitholders. The Board recognizes the valuable leadership that Dick Kinzel has provided the Company during his years of service as Chairman and CEO, and appreciates his continued commitment to the Company. I look forward to serving in this strategic leadership and governance role as we complete the CEO succession planning transition process and continue to build on the Company’s strong 2010 performance.” The appointment of the non-executive, independent chairman will be reviewed by the Board on a periodic basis
As announced on December 6, 2010, the Board has retained Korn/Ferry International, one of the world’s leading executive recruiting firms, to assist in its ongoing CEO succession planning process, which is expected to be completed by the end of the second quarter of this year.
The Company also announced that Proposal #2, which called for the amendment to the partnership agreement to require the payment of cash distributions to unitholders as a higher priority than reducing leverage and strengthening the Company’s balance sheet for the future, failed to receive the requisite number of votes required for approval by unitholders. Three of the four leading proxy advisory firms recommended that unitholders vote against the proposal
“The Board recognizes that unitholders have a vested and continuing interest in the payment of a sustainable and growing distribution,” said Kinzel. “The Company is – and always has been – deeply committed to the payment of a distribution to our unitholders. Consistent with that commitment, the Board has agreed to review the distribution strategy during the 2011 first quarter in combination with our 2010 full-year results. As part of that process, we will consider all options available under our current capital structure with respect to the payment of future distributions. As evidenced by the past 24 years the payment of a distribution is among the Board’s highest priorities.”
The Company today filed an 8K with the Securities and Exchange Commission which sets forth the detail of the final voting results, as certified by the independent inspector of elections. The filing can be accessed via the SEC website at www.sec.gov.
Read the entire press release from Cedar Fair.
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I thought the entire idea was to have someone who had not been involved in the company as Chairman, not someone who has been on the board, and currently on the executive search team.
Morté aka Matt, Ego sum nex
Dragon's Fire Design: http://www.dragonsfiredesign.com
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Can anyone comment on Harvie's previous history with Dick and gang? any dissenting information? This just seems like more of the old for present, but maybe the future will be different?
As I just posted over at Coasterbuzz...Harvie was appointed by Kinzel to be on the board. So, "independent" is in the eye of the beholder.
They may have followed the direction of the unitholders by definition...but they did exacltly opposite of what the spirit of that vote entailed. Smacks of Kinzel's continued irresposibility and yet I'm entirely not surprised.
Second Verse...Same as the first...
I've been pondering something, only because Cedar Point is dear to my heart. Where things stand today, do you think the park (not Cedar Fair, the company) is better or worse since Cedar Fair went public? I simply have not been on the planet long enough to know the answer for myself, or have any educated perspective on the matter.
I expect a long ranting letter from Raynor to show up online any minute now. He has to have broken everything in his office by now.
I share concerns expressed by the commentators above in relation to Mr. Thomas Harvie's appointment as Chairman of the Board.
We do have good news in this release: Kinzel "voluntarily" relinquished the Board Chairmanship, a relative new comer to the Board was appointed, and CF is telegraphing they understand the dividend must be raised.
CF also has sent out a subtle message concerning Mr. Harvie's tenure, "The appointment of the non-executive, independent chairman will be reviewed by the Board on a periodic basis." This suggests Mr. Harvie is a temporary Chair. Consider it another trial balloon CF has sent up.
Unitholders will continue to demand an outside Board Chair.
Personally, I think requiring the chairman to not have ever been a company executive is stupid. I would have preferred Kinzel be able to stay as Chairman after retiring as CEO.
Hell, I think separating the positions was stupid. The same person being chairman and CEO of a big company is very common.
Q's got ulterior motives somewhere, they're being too persistent to not have.
I may be off base here, but something just doesn't seem right with them.
Very common... and a very bad idea for public companies. It's a lot like being the president and the speaker of the house in US government. No one, especially when people invest millions in your company, should be their own boss. With all of the spectacular failures of the last few years, splitting the roles is the right thing to do.
Jeff - Editor - CoasterBuzz.com - My Blog
"Kinzel voluntarily relinquished his chairman position ..."
You can't fire me... I quit.
jameswhitmore.net
Had he not voluntarily relinquished the chairman role and CF fired him from that position instead, Kinzel would have had a claim against the company for breach of contract as I understand his employment contract provides that he would have both roles.
James Whitmore said:
You can't fire me... I quit.
Raynor: Kinzel! Aren't you finished with those financial reports yet? What's eating you, boy?
Kinzel: Not happy with my work, I guess.
Raynor: What?
Kinzel: I just don't like the business side of the industry.
Raynor: Oh well if that's all ... What? You don't like the business side of the industry?
Kinzel: N-n-no.
Raynor: [to the unitholders] Kinzel doesn't like the business side of the industry!
Unitholders: Kinzel doesn't like the business side of the industry. Shame on you!
Raynor: Do you mind telling me what you do want to do?
Kinzel: Well, sir, someday, I'd like to run an … an amusement park
Raynor: An amusement park?
Kinzel: I've been studying. It's fascinating; you've no idea. Coasters and gift shops and shows ...
Raynor: [interrupts] Now listen, you: you're a CEO, and CEOs run businesses. Now, get to work!
Walt Schmidt - Co-Publisher, PointBuzz
^LOL Walt.
pkidelirium said:
Personally, I think requiring the chairman to not have ever been a company executive is stupid. I would have preferred Kinzel be able to stay as Chairman after retiring as CEO.
Why? The Chairman of the board is who the CEO answers to. People say he micromanages now. Heck, as Chairman, a new CEO would have no real power. The CEO should be able to go to the Chairman and say "This is what we want to do, and this is how much we want to spend" without the Chairman getting into anything other than "Does this benefit the company and shareholders?" I don't see Kinzel letting a qualified CEO handle things the way a CEO should.
I think separating the positions was stupid.
I'd like to hear your reasons for this one. Having someone answer to themselves, especially when they are supposed to represent the shareholders overall, is a terrible idea. Without trying to come off like I'm being rude, I really would like to see you expand on this comment.
The same person being chairman and CEO of a big company is very common.
Common doesn't equate to what is in the best interests, though. There are also many other well run companies where the role is split. To me, having the CEO and Chairman as one seems very self serving to the person in the position, and should be a conflict of interests. You can't have an impartial decision made.
Q's got ulterior motives somewhere, they're being too persistent to not have.
People keep saying this. Q's motives here are to make money, just as any other investor. Simple as that. Apparently Q thinks the company could be more profitable, and I agree. There isn't some big conspiracy here. This storm has been brewing for a while, and Q likely saw that and figured that this was a good way to make a good return on the investment. Making Money isn't evil, folks...
I may be off base here, but something just doesn't seem right with them.
And again, I ask, why? Something doesn't seem right with the way Kinzel handled this, the Falfas issue, the comments about merging w/Six Flags, but because Q wants a nice return on their investments, something doesn't seem right? I'm just not following that logic.
I think some of the concerns about Q are they might be going for a short term gain at the expense of CF's long term health.
I don't remember seeing any comments from Q that indicated they see additional profitability. They just want the distribution raised.
I don't get the "short term gain over long term health" claim that has been repeated. Isn't long term health intrinsic in the overall value of the company?
Brandon | Facebook
Well, the claim has been made that Q only keeps investments for short terms in order to get what they can and then dump. Still, that's business.
But even so, what Q is asking for isn't something that seems to be out of line with long term growth and health of the company. Heck, I think getting rid of Kinzel Cancer, even if it means by aggressive chemotherapy and radiation is better than not treating it at all, which was what was happening.
It doesn't look like it's just Q that is dissatisfied. Maybe they were the catylist to get people riled up, but people on here have been discussing dissatisfaction amongst unit holders for some time now.
djDaemon said:
I don't get the "short term gain over long term health" claim that has been repeated. Isn't long term health intrinsic in the overall value of the company?
I wish that were true. If you look at just about every other facet of our society - finance, politics, even religious institutions tend to pander to and only be interested in the short term boost and telling people what they want to hear. And people want to hear what they want to hear so they can construct a fantasy world and ignore the inevitable long term crash.
Hobbes: "What's the point of attaching a number to everything you do?"
Calvin: "If your numbers go up, it means you're having more fun."
What I was poorly attempting to ask is, have any of the "Q is evil" proponents looked at the actual share values to determine if it's even feasible that Q could "flip" CF and make money, while effectively handicapping CF for the future (which would presumably be reflected in the price of CF shares at the time Q intends to unload them)?
It doesn't make sense to me that Q could cripple CF and maintain a share value high enough to guarantee a healthy return (once Q's costs are factored in).
Brandon | Facebook
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