Allegations of CEO’s affair with subordinate rock T-shirt company Gildan, say sources.
Gildan Activewear, one of the largest apparel makers in the world, is facing a major scandal involving allegations of an affair between its CEO and a subordinate. The controversy comes at a time when the company is already dealing with a CEO shuffle and pressure from activist investors to bring back the ousted boss, Glenn Chamandy.
Last December, Gildan pushed out co-founder Glenn Chamandy and appointed Vince Tyra, a veteran executive, as the new CEO. However, it has now come to light that Tyra allegedly had an affair more than two decades ago with an employee who currently holds a senior leadership position at Gildan. A research firm report claims that the affair took place during Tyra’s time as CEO of Gildan distributor Broder Bros. from 2000-2005.
The allegations have raised concerns among shareholders and activist investors. They claim that Gildan’s board failed to conduct proper due diligence before hiring Tyra, and they fear that the CEO’s past behavior could lead to legal issues for the company in the future. Shareholders are worried about the potential damage to Gildan’s reputation, especially in the era of the #MeToo movement.
The alleged affair was uncovered by Paragon Intel, a research firm that sells annual subscriptions to investment firms. The initial background research report, which is currently being circulated, states that Tyra had a tryst with the subordinate while he was CEO of Broder Bros. The report also mentions that Paragon plans to release a final version expressing its opinion on whether Tyra should be replaced or if Chamandy should be brought back.
While some shareholders are calling for Tyra’s removal, others believe that the alleged affair is not a sufficient reason to oust him. They argue that the relationship took place over two decades ago and that Tyra was separated at the time, while the subordinate was divorced. They also point out that there are now two layers of management between Tyra and his former lover.
Corporate governance experts have differing opinions on the matter. Some believe that the relationship should be taken into consideration when evaluating Tyra’s suitability for the CEO position, while others argue that it happened too long ago to be a major concern.
The battle between Gildan’s board and activist investors has been heated, with both sides trading accusations. The board has accused the activists of spreading false stories to influence the upcoming shareholder vote, while the activists claim that the board failed to act in the best interests of the company.
Glenn Chamandy, the ousted CEO and co-founder of Gildan, has expressed his disappointment with the board’s actions. He believes that they are undermining his record and tarnishing the company’s reputation. Chamandy had been at the helm of Gildan for over two decades and was looking to make large acquisitions that the board disagreed with.
Gildan’s financial performance has also come under scrutiny. The company posted a slight decline in revenue and net income last year, leading some analysts to argue that Chamandy’s track record did not justify the board’s decision to remove him.
While Tyra is only a month into his tenure as CEO, he has indicated that he plans to enhance, rather than alter, Chamandy’s growth strategy. Investors are awaiting a more detailed strategy update from Tyra in the coming months.
The scandal surrounding Tyra’s alleged affair and the ongoing battle between Gildan’s board and activist investors have created significant uncertainty for the company. Shareholders will have an opportunity to weigh in on these issues at the upcoming annual meeting on May 28. The outcome of the shareholder vote will determine the future direction of Gildan Activewear.
