One of the stocks I've been following for the last few weeks around its proxy battle is International Game Technology (IGT).
It had its shareholder meeting yesterday and it turned out to have a few fireworks.
Jason Ader's investment group had been running a slate of three nominees to get elected at the meeting. But they ended up only getting one elected to the board. The reason is that they ran the former IGT chairman on their slate, who had too much governance baggage of his own in the eyes of ISS.
One of the most interesting tidbits that I heard from the meeting was that one irate shareholder got up to the microphone and persisted in asking CEO Patti Hart about her misuse of the corporate jet and other lax oversight of the board. At one point, Patti broke down and started crying in the middle of the meeting claiming that the only time she ever used the corporate jet for personal use was when she had to attend a snap funeral.
The shareholder wasn't ameliorated and promised to follow up with the Securities and Exchange Commission to look into the matter.
I first wrote about Hart's use of the corporate jet seemingly for personal use a few weeks ago in Forbes, including many details from a "person familiar with the matter." The company has never disputed any of the details of those posts.
With Ader's representative on the board, I expect there to be more pressure on Hart and the rest of her somnambulant hand-picked board in the coming months. Most of this pressure will likely happen in private.
What's likely to happen is that we will see some announcement late on a Friday afternoon that Hart has decided to spend more time with her family and is retiring from IGT after such a successful tenure since her hiring in 2009. It will rather be the result of a board being pushed to act sooner, rather than being embarrassed later.
I am no fan of Hart. I believe she wreaked havoc on the Yahoo! (YHOO) board for a number of years and escaped a full grilling for her role in hiring Scott Thompson for the CEO job there and for bolstering her academic credentials in her bio. Where there's smoke, there's fire and she has a way of playing with matches behind Smokey the Bear's back.
Assuming that Ader will continue to pressure the IGT board from the inside and Hart is probably a wounded animal now, it might be time to look at IGT's stock again. Its enterprise value-to-EBITDA ratio is 7x and its forward price-to-earnings ratio is 12x.
Its revenue has been flat for some time. With a new leader, it has the ability to start shoring up morale at the company and finally growing the top line again.
Keep an eye on IGT.