Hyundai Motor Co. gained support from U.S. proxy adviser Glass Lewis & Co. LLC for some of its proposals in its proxy battle with New York hedge fund Elliott Management Corp., Bloomberg reported March 9, citing a letter from Glass Lewis.
The South Korean carmaker is under pressure from Elliott to restructure its business and pay out 7 trillion South Korean won in 2018 dividends from Hyundai and Hyundai Mobis Co. Ltd.
According to the report, Glass Lewis in a letter urged shareholders to vote against the activist investor's dividend proposal, saying Hyundai would need to invest heavily in research and development and mergers and acquisitions.
"We remain reluctant to recommend shareholder support for such a large one-time dividend payout at this time, given the proposed timing and method of the capital return and the rapidly evolving nature of the auto industry," Glass Lewis reportedly said.
While Glass Lewis agreed with Elliott that Hyundai is "significantly overcapitalized" compared to its peers, the proxy firm reportedly said that it recognizes the carmaker has "at least taken steps in the right direction" to boost shareholder value.
Glass Lewis also supported Hyundai's nominees for independent directors, but opposed the nominations of Albert Biermann and Lee Won-hee as inside directors, citing independence of the board and the nominating committee, Bloomberg added. The firm also supported the appointment of Euisun Chung, Hyundai's vice chairman and heir apparent, as an internal director.
A shareholder vote in relation to the proposals is scheduled for March 22.
As of March 8, US$1 was equivalent to 1,132.35 South Korean won.