Quality Systems Inc.’s shareholder meeting Wednesday saw verbal sniping and a shareholder vote on a contentious battle for directors at the medical software maker.
The results of the vote won’t be known for days.
Ahmed Hussein, an Egyptian businessman who owns some 18% of Irvine-based Quality, is running for a board seat along with two others. His slate faced off with a group led by Sheldon Razin, Quality’s chairman, cofounder and other dominant shareholder.
“This is not a beauty contest,” Hussein said before laying out his slate’s case.
Hussein mainly focused on his argument that stock option packages for Quality managers and directors approved by the current board in the past year are excessive in light of Quality’s size,the company had $89 million in revenue for the 12 months ended March 31.
“If you pay (directors) half a million dollars, there goes the core of their independence,” Hussein said.
Later, during a discussion of a proposed stock option plan, Hussein called the proposal “outrageous.”
Vincent Love, a Quality director running on management’s slate, focused on his group’s credentials and background. He praised Chief Executive Louis Silverman as “the driving force” behind Quality’s performance.
Quality’s shares have doubled this year with a recent market value of $850 million.
“There is a lot to be said,” Love said but referred attendees to the company’s proxy statement.
Quality management argues that their company’s compensation has been lean and that corporate government principles set in place by Hussein when he became a Quality director in 1999 are too harsh.
Hussein and Silverman traded barbs prior to opening the floor for any shareholder who wanted to vote in person.
Hussein kicked the jockeying off by mentioning that Quality’s decision to reduce the size of its board earlier this year changes “my ability to elect” directors.
“That’s out of order,” Silverman replied.
“I challenge the company,” Hussein said.
“That’s off-topic,” Silverman said, before asking if ballots were distributed to shareholders.
Silverman adjourned the meeting after learning that the election inspector hasn’t concluded tabulating the ballots.
