Cutera Inc. (CUTR), a manufacturer of skincare and body-sculpting devices, has announced it will hold a special shareholder meeting on June 9 to determine whether to remove five directors. The move comes amid concerns the directors may be acting too slowly on the company’s CEO succession plans. Proposals for the removals come from Daniel Plants, executive chair and chief executive David Mowry. On Wednesday, Cutera Inc. fired Daniel Plants and David Mowry, who were also accused by Cutera’s management of waging “an apparent campaign to seize control of the company”.
The June 9 meeting is designed to address the concerns of shareholders and address the current uncertainty surrounding the leadership succession. The background to the dispute centers on a potential power struggle between Cutera’s management and its former executives.
Plants and Mowry, the fired executives, recently wrote a letter to the Cutera Board requesting the special meeting. The duo proposed that five current directors, including Plants himself, be removed, stating that the current board has failed in its fiduciary duty by acting recklessly and prioritizing their self-preservation over the interests of the company and shareholders. They also accused the board of trying to suppress the shareholder vote by suppressing the request for a special meeting.
Cutera’s management opposed the proposal, calling the two former executives “opportunistic, self-serving, and reckless”. Cutera’s management also accused Plants and Mowry of launching a misleading campaign, alleging that the plan to remove the five directors, who were elected in 2020, is an attempt by Plants and Mowry to unfairly influence the outcome of the upcoming annual meeting.
Cutera has experienced impressive financial success in recent years, with revenue growth of over 20% in 2019, hitting $185 million. However, the company has faced challenges related to the COVID-19 pandemic, which has disrupted the global medical device market.
One of the key issues at stake in the special meeting is the process to find a new CEO for Cutera. In the letter to the board, Plants and Mowry criticized the current board for its slow progress in finding a suitable candidate for the top job. They argued that this delay has led to Cutera losing a top candidate due to conflicting timelines.
On the other hand, Cutera’s management claims that significant progress has been made in identifying a new CEO, with the process reportedly in the final stages. The company stated that the process was robust and thorough, including considering an internal candidate.
The upcoming shareholder meeting will provide the opportunity for all parties to present their case and for shareholders to decide on the fate of the five directors in question. The company has confirmed that the results of the shareholder vote will be binding.
The drama at Cutera serves as a cautionary tale of corporate governance and highlights the importance of transparency and accountability in the boardroom. With the special meeting set for June 9, it remains to be seen what the outcome will be and how it will impact the future leadership at Cutera.
In conclusion, the ongoing saga at Cutera Inc. stems from concerns over the company’s CEO succession plans and allegations of an attempted power grab by two fired executives, Daniel Plants and David Mowry. A special shareholder meeting has been called for June 9 to determine whether to remove five directors, including Plants, from the board. The shareholder vote will determine the future board composition and could significantly impact the leadership of the company moving forward. This case offers a cautionary tale on corporate governance, highlighting the importance of transparency and accountability in the boardroom.
