GREENWICH, Conn., Oct. 19, 2020 /PRNewswire/ -- Wax Asset
Management ("WAM") and Assurance Global Services LLC ("AGS"),
long-term owners who seek to ensure that the companies in which
they invest act with integrity and accountability, and significant
shareholders in Computer Task Group, Inc., sent the following
letter to CTG's Board urging its members to improve its governance,
compensation and financial disclosure practices.
*****
October 19, 2020
Board of Directors (the "Board")
Computer Task Group Inc.
("CTG" or the "Company")
800 Delaware Avenue
Buffalo, NY 14209
Attn: Daniel Sullivan, Chairman
Dear Members of the Board of Directors:
We write to you again as shareholders of 6.4% of CTG's common
stock. Since privately and publicly engaging with the Board
of CTG over the last year, we have tried to persuade the Board to
improve the Company's governance, operational and capital
allocation capabilities in order to generate superior shareholder
value.
Shortly after the recent annual shareholder meeting of CTG, the
Company publicly boasted of the Board's proposals being approved by
shareholders by a "significant margin." However, there is
clear shareholder discontent. Less than 48% of the shares
entitled to vote were in favor of the 2020 Equity Award Plan.
Shareholder votes "For" independent director nominations have
tumbled by more than 50% from 15 million to 7 million shares since
2014. The Company's lack of recognition of the shareholder
discontent beyond the Company's public statements demonstrates an
obvious sense of immunity within the boardroom.
This lack of accountability by the Board is shocking after the
number of failed promises to shareholders by the Chairman since
2014 and the greater than 50% decline in CTG's share price since
2014, while peers, such as Mastech Digital, have transformed and
gained more than 300% since 2014.
The Board has an opportunity to regain credibility with its
shareholders through the following actions:
- Reduce director compensation to appropriate peer levels and in
cash because it represents a significant conflict for Board members
to be granted 1% of a Company's shares per annum at levels the
Board has deemed significantly undervalued;
- A personal commitment by directors and insiders to purchase
shares in the open market if they genuinely believe in the
Company's transformation and undervalued level of its shares;
- Reconstitution of the Board to include proven value creators in
digital transformation, financial and capital allocation; and
- Disclose quarterly segment and geographic profitability,
acquisition results and the value of the European
government-sponsored reimbursement programs as previously requested
by multiple analysts.
The Board needs to take these actions to fulfill their
responsibility to the Company and its shareholders.
Sincerely,
/s/ Evan
Wax
|
/s/ James
Lindstrom
|
|
|
Evan
Wax
|
James
Lindstrom
|
Wax Asset
Management
|
Assurance Global
Services
LLC
|
About AGS and WAM
AGS is a value-oriented, operations-focused private and public
investment firm.
WAM is an investment advisory firm that engages in the
acquisition and disposition of investments.
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SOURCE Assurance Global Services LLC