Meritas Mutual Funds withheld its votes from all board directors at Magna International Inc. at the company's annual meeting May 6.

 

Meritas CEO Gary Hawton said there are two key issues that investors have with Magna -- a dual-class share structure that allows Magna's founder and chairman, Frank Stronach to control just 3.4% of the equity of Magna International Inc. but maintain control over the entire firm, and the level of compensation provided to Stronach, amounting to over US $36 million in 2003.

 

Meritas made their position public before the annual meeting.

 

"It was decided long ago that we would withhold our vote and we posted that on our website but we really felt the need to take a public position on this and to encourage other investors to follow suit," Hawton said.

 

Meritas owns its shares in Magna International Inc. within the Meritas Jantzi Social Index Fund.  This fund is designed to track the 60 companies within the Jantzi Social Index that was created and monitored by Michael Jantzi Research Associates (MJRA), Canada's leading provider of social and environmental research on public companies.

 

"Corporate governance is a key determinant of a company's rating within our framework," said Michael Jantzi of MJRA.

 

"Issues like dual-class share structure, board and auditor independence, and executive compensation are all variables that we evaluate when we analyze a company.  It is likely impossible to find a company that is perfect in all areas of corporate governance, in addition to the other social and environmental issues that we analyze, but we appreciate when companies like Meritas Mutual Funds and other investment managers take concrete action asking these companies to correct what they perceive to be deficiencies in these areas."

 

For more information, visit www.meritas.ca.