Leading Independent Proxy Advisory Firm ISS Recommends Shareholders Vote FOR DATATRAKs Entire Slate of Director Nominees on the WHITE Card
DATATRAK International, Inc. (OTCQX: DTRK), the leader in developing cloud-based, unified dClinical™ technologies and delivering related services for the clinical trials industry, today announced that leading proxy advisory firm Institutional Shareholder Services ("ISS") has issued a comprehensive report recommending that the Company's shareholders vote FOR the election of DATATRAK's nominees, Laurence P. Birch, William C. Coates, and Nicholas A. Loiacono as directors on the WHITE proxy card. The Company's Annual Meeting of Shareholders will be held on November 11, 2015.
ISS is a leading independent U.S. proxy advisory firm and its voting analyses and its recommendations are relied upon by hundreds of major institutional investment funds, mutual funds and fiduciaries throughout the country.
In its analysis ISS concluded that the dissident, Arosa, had not made a compelling case that change at the Board level is warranted, and recommends shareholders vote FOR the management nominees on the WHITE card. In reaching its conclusion that DATATRAK shareholders support the Company's nominees, ISS not only went through a thorough analysis and evaluation of the Company's performance and Arosa's critiques but also heard directly from Arosa and its nominees, as well as DATATRAK and its Board of Directors.
Commenting on the ISS report, Laurence Birch, the Company's President and CEO said, "We are very pleased that ISS, a highly respected independent proxy advisory service, recognizes the substantial progress we have made in executing the turnaround of the Company, positioning the Company for long-term, profitable growth, and creating long-term value for shareholders. It is clear that Arosa's attempt to take control of the Board without paying shareholders a premium and without a strategic plan for the Company is not in the best interest of DATATRAK shareholders. We encourage shareholders not to be misled by Arosa's false claims and to take the ISS recommendation into strong consideration and vote in favor of all three of DATATRAK's nominees so we can continue to execute on behalf of all shareholders."
In reaching its conclusion, ISS remarked on the significant turnaround that has taken place at DATATRAK since the Company was near bankruptcy in 2008 and directly rebuked several of Arosa's claims.
With regard to total shareholder return (TSR) under the leadership of current CEO Laurence Birch, which Arosa has erroneously focused its TSR calculation on periods where the current management team was not in place, ISS said,
"In the two years prior to the Jan. 21, 2009 appointment of CEO Birch, the company's shares declined 97.2 percent, 55.9 percentage points below the Russell 3000 Index. However, since the CEO's appointment through the Oct. 9, 2015 unaffected date, the company's shares have increased 210.1 percent, 69.0 percentage points above the Russell 3000 Index… The Company has outperformed its peer group by 50.7% over the past three years."*
With regard to the operational performance of the Company under CEO Laurence Birch, which Arosa has criticized, ISS said:
"According to the dissident [Arosa], the company's net losses suggest that change is needed at the board level. However, revenue and cash from operations have been growing since the current CEO took office in 2009. Since 2010, revenue and cash from operations have grown at a compound annual rate of 10.4 percent and 73.6 percent, respectively."*
Moreover, ISS stated: "The company was at risk of insolvency in 2008. It appears that management guided a significant turnaround from near bankruptcy and continues to show progress moving forward. Cash from operations, revenue, and backlog are all trending in a positive direction."*
With regard to Executive Compensation, which Arosa has incorrectly characterized at DATATRAK, ISS issued a direct reprimand to Arosa:
"According to the 2014 Annual Report, the company paid CEO Birch and CFO Mabe base salaries of $357,231 and $181,809, respectively. Therefore, the cash paid to the CEO and CFO does not appear to be as problematic as stated by the dissident."* (bolded for emphasis).
With regard to Arosa's vague "plan" for DATATRAK, ISS once again rebuked Arosa's claims:
"The fact that the dissident's own plan for the company highlights the need to invest in sales & marketing does not seems to support claims that current capital allocation is inappropriate. As evidenced by the year-over-year increase in backlog, management already appears to be executing a strategy that addresses several objectives of the dissident plan."*
DATATRAK urges stockholders to vote the WHITE proxy and allow us to execute on our strategic plan, which ISS acknowledges is working. We strongly believe any disruption to management and the Board would derail the progress we have made. We believe in the future of DATATRAK. Please do not be misled by Arosa. If you have already voted a Blue proxy card, a later dated WHITE proxy card will revoke that vote.
DATATRAK urges shareholders to vote "FOR ALL" of DATATRAK's highly qualified, experienced director nominees: Laurence Birch, William Coates, and Nicholas Loiacono on the WHITE PROXY CARD.
These nominees have a significant track record of aligning themselves with shareholders and are the right individuals to build upon the Company's current momentum.
If you have any questions on how to vote your shares, please call Morrow & Co., LLC toll free at (800) 662-5200 or (203) 658-9400.
*permission to use quotations was neither sought nor obtained.