Crown Castle crows as shareholders approve board composition

Crown Castle has secured the backing of its shareholders for its proposed board of directors, a move that counts as a brag-worthy win in its ongoing public battle with investor Boots Capital.

In recent months the US-based towers company has come under fire from activist investors expressing serious doubts over its strategy, management and governance. Winning the shareholder vote for a board of directors it proposed effectively gives it the go-ahead to proceed with a strategic review of its business at its own pace, for now at least.

"We thank our shareholders for the trust they have placed in our highly qualified board members as they oversee the creation of a stronger, more valuable Crown Castle," the firm said in a statement, in which it shared that based on preliminary information from its proxy solicitor, all 12 of its board nominees were approved at Wednesday's annual shareholder meeting.

"Along with our new CEO, Steven Moskowitz, the board continues to take action, including conducting the strategic and operational review of our fiber and small cell business already underway, to improve performance and unlock shareholder value," Crown Castle said.

On a related note to that last point, Crown Castle separately revealed that its board has approved a quarterly cash dividend of $1.565 per common share, payable next month.

While investors will not necessarily disagree with the outcome of the strategic review, as far as they are concerned it has been too long coming.

Elliott Investment Management and Boots Capital Management have been highly vocal in criticising Crown Castle in recent months. Both claim tens of billions of dollars in potential shareholder returns have been lost as a result of poor management at the towers company and both have called for the sale of its fibre business.

Most recently, Boots Capital, under the guidance of Crown Castle co-founder and one-time CEO Ted Miller, launched a scathing attack on the towers firm, accusing it of having "no credible plan to reverse years of underperformance," amongst other things. Boots Capital claims to have put forward a thorough analysis of the benefits of the sale of the fibre business, but says Crown Castle's board declined to look at it.

In addition to its war of words, Boots Capital put forward its own slate of nominees for the Crown Castle board and lobbied hard for shareholders to vote for it. Last week Miller sent an open letter to Crown Castle shareholders urging just that.

"Since our involvement, Crown Castle has added a new CEO and has shown an openness to finally selling fiber. Those are each worthy moves. Shareholders are telling us they want Boots to help drive the necessary changes by replacing decades-old directors responsible for this quagmire and once again focusing Crown Castle on the operations of its core tower business," the letter reads.

"Simply put, the Boots nominees bring a detailed, informed view on fiber and a plan for the tower business based on decades of experience as Crown Castle and industry founders."

But clearly shareholders were not swayed and Crown Castle secured the support it needed to place its preferred candidates on the board. Stockholders are clearly buying into the promise of a turnaround under the new CEO, who took office as recently as April.

Crown Castle has a long way to go in that process and much will hinge on the outcome of that fibre and small cells strategic review. A sale – at the right price – could well mollify the activist investors, but the firm will also have to persuade them that it is heading in the right direction with its core towers business too.

Essentially, these are still turbulent times for Crown Castle, but the company has secured itself some breathing space.