WATERBURY, Vt.-The board of directors of Green Mountain Coffee Roasters (GMCR), parent company of the Keurig brand, has removed its chairman, Robert Stiller, and its lead director, William Davis, from their roles.
Michael Mardy, director and chair of Green Mountain’s audit and finance committee, has been named interim chairman. Hinda Miller, chair of the company’s corporate social responsibility committee, has been appointed chair of the governance and nominating committee.
In a statement, Green Mountain explained that the actions were taken to address stock sales by Stiller’s and Davis’ brokerage firm, which the company said were “inconsistent with (its) internal trading policies.” Stiller and Davis had margin call-related sales of 5,548,000 shares, which Green Mountain described as “forced sales … related to margin loans, which were secured by pledges of Mr. Stiller’s and Mr. Davis’ GMCR stock and triggered by recent GMCR stock price activity.”
On May 7, Green Mountain said, 5 million shares were sold from Stiller’s brokerage account at a time when the trading window in Green Mountain stock was closed pursuant to the company’s internal trading policy. Similar sales occurred from Davis’ account on May 4 and May 7, totaling 548,000 shares altogether. In addition, when the company looked into these stock sales, it discovered that Davis had pledged about 204,000 shares to his margin loan after Jan. 1, also against Green Mountain policy.
“Based upon the recent decline in (the) GMCR stock price, Mr. Stiller and Mr. Davis were faced with margin calls resulting in sales of their GMCR stock,” Green Mountain said. “These forced sales are disappointing and beyond the control of the company.” After closing on May 2 at $49.52 a share, Green Mountain’s stock fell to a closing price of $25.87 a share on May 3. Before the opening of trading this morning, the price stood at $26.38 a share.
Stiller and Davis remain on the board but will no longer serve on any board committees or receive future payment for their services until the board determines otherwise. The board has also directed them to settle all their outstanding margin loans by the end of calendar 2012.