The stockholders at Donegal Group Inc. have rejected another of activist shareholder Gregory Shepard's plans to change what he believes are inequities in the company structure.
At its yearly stockholder meeting Thursday, the company announced in a Securities and Exchange Commission filing that it rejected the proposed recapitalization plan that would have given equal voting power to holders of the company's Class A and Class B stock.
Currently, holders of Class A stock have one-tenth of a vote, while Class B holders have one full vote. Shepard proposed in a Nov. 18 SEC filing for the company to adopt a plan giving one vote per share for all stock.
Donegal's board of directors recommended the rejection of the idea, and the shareholders followed through with 5,629,881 votes against the plan, and 907,894 votes for it.
Shepard owns 3,672,900 Class A shares, and 397,100 Class B shares, according to SEC filings.
It was the latest shareholder rejection of a Shepard plan to gain more control in the company. In February, he dropped a plan to purchase additional Donegal stock.
However, earlier this month he offered a closing bonus reward — estimated between $5 million and $20 million — for anyone who buys the company.
Shepard is openly critical of the board, and often directs his criticism at Donald H. Nikolaus, the company's president and CEO. In Shepard's announcement confirming the closing bonus, he called Donegal Group's board "one of the worst boards in corporate America."