Southborough electric vehicle firm fighting to remove former chairman
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Sevcon manufactures parts for electric vehicles, such as this electric truck.
A $50-million Southborough manufacturer specializing in parts for electric vehicles on Thursday made its case to shareholders to permanently remove its former executive chairman from its board of directors, while he is seeking to replace three of the company's eight directors.
Sevcon, Inc. put out a press release late Thursday urging its stockholders to vote for its slate of nominated board members at the company’s Feb. 7 annual meeting, saying the firm is on the cusp of realizing strong revenues from electric vehicle conversion demand – a move put into motion by the existing board two years ago. Sevon's slate of board members replaces former executive chairman and current board member Ryan Morris with retired chairman Marvin Schorr.
"This is forcing me to have to file my own proxy just in order to remain on the board which is very important to me as a 20-percent shareholder" Morris said.
Morris, whose San Francisco investment firm Meson Capital owns a 20-percent stake in Sevcon, has nominated a different slate of six possible board members, including himself, said Morris, who has served on the board since 2013 and served as its executive chairman from July to December.
If Morris' slate of nominees is successful in the vote, he then must choose which four would serve on the board, since only four board seats are available to be filled, he said.
Sevcon reported a net loss of $6.2 million in 2016, after turning a profit of $1.1 million in 2015, according to its annual report filed on Dec. 23. The loss came even though its had $50 million in revenue in 2016, compared to $41 million in 2015.
In a Dec. 21 letter urging stockholders to vote in favor of his nominees, Morris’ Meson said Sevcon is uniquely positioned to take advantage of the electrical vehicle market, but the current board members are underperforming and refusing to embrace the need for change, which will result in the company missing out on the market opportunity in the next two years. Meson’s board nominees include the former leader of the Chevy Volt program and CEOs and founders of technology and software companies.
In its rebuttal on Thursday to Meson’s letter, Sevcon said its current board members have positioned the company for strong growth and its acquisition of an electric vehicle charging company makes it uniquely positioned to offer added value to manufacturers looking to partner with electric vehicle parts makers.
CORRECTION: A previous version of this story incorrectly said Ryan Morris was attempting a hostile takeover of the company by replacing six of the board's eight members. In actuality, he has nominated six people, including himself, for election to four board positions, which would not give his company a controlling number of board positions.
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