Online Resources Corp., a vendor of online banking and payment processing services, criticized an investor advisory service Monday for recommending the election of some board candidates backed by a dissident shareholder group.
The proxy advisory service RiskMetrics Group Inc. of New York published a report in March recommending that its subscribers vote for two nominees put forward by the hedge fund Tennenbaum Capital Partners LLC, which owns more than a fifth of Online Resources' common stock.
"Though not surprising given its well known tendency to support minority dissident shareholders, it is disappointing to see RMG be so inconsistent and incomplete in their analysis," Michael H. Heath, the lead independent director of the of Chantilly, Va., vendor and the chairman of its governance committee, said in a press release.
RiskMetrics recommended that shareholders not vote for the three management nominees, including Heath, and to vote for John Dorman, a former president and chief executive of Digital Insight Corp. (now a unit of Intuit Inc.) and Edward D. Horowitz, a former e-banking executive at Citigroup Inc. The company recommended shareholders withhold votes from the third Tennenbaum nominee, Bruce A. Jaffe, a former executive at Microsoft Corp.
Shareholders are scheduled to meet May 6.
In a presentation to analysts last month, Online Resources said Tennenbaum's key asset is a preferred seven-year security for financing the vendor's 2006 purchase of the Internet payment processor Princeton eCom. Tennenbaum would profit most by an immediate sale of Online Resources and common shareholders would profit most by allowing the company to continue on its course, Online Resources said.