Ex-director blasts "dismal" performance by Alliance Trust
Alliance Trust has once again come under fire for its performance, this time from a former non-executive director who has criticised the company for a "dismal" performance in an open letter to shareholders.
In the letter, Tim Ingram, who was on the board between 2010 and 2012, lent his support to recent calls by 12% stakeholder Elliott Advisors for the addition of three new non-executives to the board.
He did, however, make it clear his views were given separately to those of Elliott.
"I will be voting my shares in favour of the three new directors joining the board, and would suggest that any other shareholder seeking better returns does likewise," he wrote.
"The overall performance of Alliance Trust is the medium term has been dismal."
According to the Sunday Times, the letter highlights that the group's performance was behind that of three trusts of a similar size and pointed to figures which reveal that its returns fell short of the average seen over the past five years in the "global growth" sector.
Ingram continued by saying that the group "simply will not address two of the main reasons for such marked underperformance" and that "even just 'average' performance would improve the share price and value".
The two reasons are that it doesn't outsource any of the investment portfolios and what Ingram describes as its two "distracting" focus on loss-making subsidiaries.
"It is an uncomfortable fact that the latest annual accounts show that the remuneration of the Alliance Trust chief executive over the five years of such dismal underperformance has totalled over £6m," the letter reads.
"The chief executive of an investment trust with good third-party managers and without these loss-making subsidiaries could not possibly justify such a remuneration level, and this would, therefore, save additional money for us shareholders."
Alliance Trust responded to the letter by saying: "The board has written to shareholders and clearly set out its reasons for rejecting Elliott's requisitions. We believe their interests are at odds with other shareholders and this is just the start of their disruptive action."
The company also said it encouraged all its shareholders to "protect the future of Alliance Trust" by voting against Elliott's proposed resolutions.