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Corporate governance initiatives promulgated by activist hedge fund manager Andrew Shapiro at Mace Security International Inc. are finally beginning to take effect.
The electronic surveillance security devices maker late Tuesday filed a proxy for its upcoming Dec. 14 annual meeting, producing the names of six board nominees that company officials agreed to after Shapiro and his activist fund Lawndale Capital Management threatened a proxy contest last month. On Oct. 16, Mace and Shapiro settled — Lawndale dropped its proxy contest threat, and Mace agreed to change its board structure, increasing the number of independent directors and adding two nominees recommended by Lawndale, Dennis Raefield, a security products industry executive, who was added to Mace’s board immediately, and Gerald LaFlamme, a retired accounting and real estate executive. According to the company proxy, three of the five independent nominees are new to Mace’s board and two incumbent directors, including Matthew Paolino, the brother of Mace chairman and CEO, Louis Paolino Jr., will not stand for election. “We believe the board and governance changes Lawndale’s actions produced will result in a more engaged, qualified and independent board,” Shapiro said. “The resulting enhanced managerial oversight and accountability should help lead to substantive operating improvements and eventually a much higher stock price for Mace.” The other nominees are Louis D. Paolino Jr., Mark S. Alsentzer, Constantine N. Papadakis, Gerald T. LaFlamme and John C. Mallon, also a security products industry executive. In September, Mace’s second-largest holder, Ancora Capital Inc., reported owning an 8.6% stake, and according to an SEC filing, portfolio managers there have come out in support of Lawndale. Mace Security has a $32 million stock market capitalization. — Ron Orol See proxy filing from the SEC's Edgar Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. Categories Deal Video
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