Hemp-CBD products company Charlotte’s Web Holdings has appointed Bill Morachnick as chief executive and board director, replacing Jacques Tortoroli, who resigned as CEO and from the company’s board.
However, Charlotte’s Web rejected the resignations of three other board directors after a withhold campaign by a group of activist shareholders in June, according to a Wednesday news release.
Morachnick previously served as president of Santa Fe Reynolds Tobacco International and “led the subsequent integration” of the company after it was acquired by the Japan Tobacco Group.
Colorado-based Charlotte’s Web hailed Morachnick in the release as “a proven entrepreneurial professional skilled in taking companies global and creating and managing strategies for consistent and sustained growth.”
Outgoing CEO Tortoroli was appointed chief executive at the end of 2021. He had sat on the Charlotte’s Web board since November 2019.
Tortoroli’s departure comes after he and three other board members failed to receive a majority of votes cast in a June shareholder’s vote and tendered their resignations.
Ahead of that board election, Charlotte’s Web co-founders Jesse and Joel Stanley and a group of other concerned shareholders – including Major League Baseball, a high-profile Charlotte’s Web partner – campaigned for investors to withhold their votes for four of six board nominees, including Tortoroli.
“The truth is that the actions of this board have clearly contributed to the destruction of shareholder value,” Jesse Stanley said in a June statement.
The concerned shareholders, who owned nearly a quarter of Charlotte’s Web, cited the company’s plummeting stock price and declining revenue after Joel Stanley left the board in 2021.
The group sought the Stanley brothers’ nomination for election to the board of directors alongside two other candidates.
In its Wednesday news release, Charlotte’s Web said a committee of independent board members had reviewed the issue “and determined that there are exceptional circumstances that warrant the rejection of the offers to resign.”
Board directors John Held, Thomas Lardieri and Alicia Morga remain on the board, Charlotte’s Web Director of Investor Relations Cory Pala confirmed to MJBizDaily.
Tortoroli’s seat on the board has been filled by Morachnick as a nonindependent director.
“The majority voting objectives of the Toronto Stock Exchange and (the company’s majority voting) policy are the continuous improvement of corporate governance standards through provision of a meaningful means for security holders to hold individual directors accountable,” Charlotte’s Web said in a statement.
“The withhold campaign launched by the activist shareholders, however, was not aligned with those objectives.”
Solomon Israel can be reached at firstname.lastname@example.org.