Brookdale Senior Residing (NYSE: BKD) has declared victory in its proxy combat with Ortelius Advisors.
The nation’s largest operator on Friday introduced that, primarily based on preliminary outcomes, shareholders have elected all eight of Brookdale’s board of director nominees through the firm’s annual assembly. Based mostly on the preliminary vote rely, the Brookdale board is slated to be composed of Jordan Asher, Claudia Drayton, Mark Fioravanti, Victoria Freed, Joshua Hausman, Elizabeth Mace, Denise Warren and Lee Wielansky.
“We stay targeted on executing our 5 key initiatives – bettering working efficiency, optimizing our actual property portfolio, reinvesting capital into communities, decreasing leverage and guaranteeing high-quality environments for residents and associates,” the corporate stated in a press launch. “With our robust momentum thus far this yr, we’re assured Brookdale is well-positioned for fulfillment as we capitalize on strong demographic and business tailwinds.”
With its newest problem now behind it, the senior residing operator is popping its consideration to discovering a brand new CEO to exchange Cindy Baier, who stepped down from her put up in April. Denise Warren at the moment leads Brookdale as interim CEO.
Brookdale is the biggest senior residing operator within the U.S. with 645 communities in 41 states.
Ortelius had beforehand pushed for sweeping adjustments on the Brentwood, Tennessee-based firm that may have included asset gross sales and unwinding leases of underperforming communities. The corporate earlier this yr nominated Steven Insoft, Paula Poskon, Frank Small, Ivona Smith, Steven Vick and Lori Wittman for Brookdale’s board of administrators.
Ortelius Managing Member Peter DeSorcy beforehand wrote that Brookdale’s board and administration workforce “spearheaded the huge destruction of stockholder worth, and should be held accountable.” Previous to Friday’s vote, the 2 corporations for months waged a back-and-forth proxy combat that finally roped in impartial advisory corporations Institutional Shareholder Providers (ISS), Glass Lewis & Co. and Egan-Jones Scores Co.
On the coronary heart of the activist investor’s argument was allegations of “years of missteps and shortcomings” that led to decrease occupancy and NOI margin charges and whole stockholder returns in comparison with corporations together with Welltower (NYSE: WELL) and Ventas (NYSE: VTR).
However these arguments finally didn’t seem to influence Brookdale shareholders throughout Friday’s vote.
Days earlier than Friday’s assembly, Brookdale administration referred to as the corporate’s present weighted common occupancy fee of 80.1% “a key milestone for money move progress.” Brookdale believes that regaining pre-pandemic occupancy of 84.5% would lead to at the least $200 million of incremental income, whereas returning to the operator’s earlier occupancy excessive of 89% would lead to at the least $380 million of incremental income.
The corporate has deployed “SWAT groups” at underperforming communities with the purpose of bettering operational and monetary outcomes.
Brookdale’s NOI margins within the first quarter of 2025 registered at 28.6%, representing a acquire of 130 foundation factors versus the identical interval in 2024.
This isn’t the primary time Brookdale has fought off a proxy combat from an activist investor. One other firm, Land & Buildings, in 2019 launched a heated marketing campaign to put in its personal board candidate. That bid finally fizzled when the activist investor withdrew its nomination.
