Activist shareholder Peter Kross succeeded last week in electing three directors to the board at Waukesha-based Telkonet Inc.
Kross, Leland Blatt and Arthur Byrnes were elected at the annual meeting of shareholders June 27. Three existing directors the board wished to re-elect, William Davis, Kellogg Warner and Jeffrey Andrews, were ousted from the five-member body.
The company filed an SEC document Friday afternoon indicating the result of the vote.
John Stark, chief financial officer at Telkonet, compared the director election to the mid-season decision by the NBA’s Cleveland Cavaliers to replace head coach David Blatt with Tyronn Lue, who led the team to a championship.
“It didn’t mean the other coach was a bad coach, but Cleveland ended up winning the NBA Championship,” he said. “I thought the former board did an excellent job, just like I think the former coach of the Cleveland Cavaliers did an excellent job.”
Stark said the new board has not met yet, but he doesn’t expect a major sea change at Telkonet beyond addressing the concerns Kross brought up in his proxy statement.
“This was a vote by the shareholders and so it means that the shareholders want to try to mix things up a little bit to try to help the company,” Stark said. “Because basically, the shareholders are interested in the top line and the bottom line of the company. I think anytime you have an election there’s always an element of uncertainty. I don’t know that anyone expected it, but I don’t know that anyone’s terribly surprised by it either.”
Kross, who made his plan to nominate his own directors public in March, could not be reached for comment. Kross, who holds 2.9 percent of the company’s shares and was active in contacting other shareholders with his concerns about the company, is the founder and general partner of activist investment firm LaSalle Financial Partners LP. He hopes his nominees will maximize shareholder value, potentially by selling the company.
For its part, Telkonet announced in March it has hired Canaccord Genuity to evaluate its potential strategic and capital raising opportunities.
Telkonet makes intelligent automation solutions that are part of the Internet of Things. It serves commercial markets worldwide.
Shareholders at the annual meeting also denied an amendment that would have allowed a reverse stock split of Telkonet’s common stock, and approved executive compensation.