Front Yard Residential CEO calls ISS recommendation 'deeply flawed'
Front Yard Residential issued the following statement in response to a report issued by Institutional Shareholder Services in connection with the election of directors to Front Yard's Board at the Company's 2019 Annual Meeting of Stockholders on May 23, 2019. CEO George Ellison commented: "It is unfortunate that ISS has failed to recognize the great strides Front Yard has taken in recent years to reposition its portfolio, capture the significant upside that exists in the growing single-family rental market and execute on its core strategic initiatives that will drive value for stockholders over the long-term. While total shareholder return is an important metric, in our case, it simply does not tell the whole story and should not be the sole determining factor on how to judge Front Yard's performance. Importantly, Front Yard's stock price is up approximately 10% since May 8, 2019, the day the Company announced its amended and restated asset management agreement with its external manager, which was designed to build long-term stockholder value and has been well received by our stockholders and the analysts that understand our business best. Accordingly, we believe ISS' analysis is deeply flawed and does Front Yard's stockholders a disservice as we believe that the addition of Snow Park's nominees to the Front Yard Board could result in significant disruption to the Company's ongoing successful transformation. Stockholders should recognize that a vote on the Blue proxy card is a vote to replace highly-qualified, experienced directors with unqualified, unknown and unvetted nominees who would not bring any new skills to the Board. In fact, the nominees put forth by Snow Park have little to no experience in the ownership and management of SFR homes and possess repetitive, finance-related backgrounds in business lines that Front Yard transitioned away from years ago. Snow Park itself is a highly-conflicted hedge fund that has a substantial short interest in Front Yard's shares, giving it a net long position well under 0.5%. This means Snow Park has minimal economic exposure to the Company or alignment with its stockholders. Furthermore, Snow Park owns 5.0% of AAMC, which it has acknowledged could result in additional conflicts of interest. The generic ideas put forth by Snow Park are fundamentally at odds with Front Yard's growth strategy, and the election of its nominees would be a step in the wrong direction. Moreover, the election of any of Snow Park's nominees would remove highly valuable and critical institutional knowledge and expertise from our boardroom and put your investment at risk. Accordingly, we are confident that Front Yard has the right Board and strategy in place to continue driving long-term stockholder value."