By Steve Moran
In some sense, it is a blah, blah, blah Brookdale story . . . Activist investor renews criticism of Brookdale Senior Living. This marks the third or fourth time Land & Buildings Investment Management LLC has “demanded” that Brookdale change the way they are doing things, believing there is a ton of unlocked value in Brookdale's owned communities.
This may also be the fifth or sixth time (or maybe more) one activist investor or another, has sung this song. For the most part, Brookdale has been publically silent or near silent. And investors have continued to shed tears of anguish.
It appears that Brookdale is making significant progress in focusing on culture and that is good news for shareholders, residents, team members, and the industry. They have some positive indicators with respect to staffing and occupancy.
Go Big or Go Home
Cindy Baier, the CEO of Brookdale, has identified three strategic priorities:
Attract and retain the best associates.
Earn resident and family trust by delivering high-quality care and services to create Brookdale advocates and generate future resident referrals.
Drive attractive long-term returns for shareholders.
These are fantastic priorities. They are perfect and they are right.
In keeping with these priorities, Cindy and the Brookdale Board should go on the offensive with "Land and Buildings". They should highlight their priorities, continuing to talk about how they are working on the priorities. Tell the world that what “Land and Buildings” is asking them to do is destructive to residents, team members, the industry, and to long-term returns to the shareholders.
They should tell “Land and Buildings” to GO POUND SAND!
A bold statement of “bring it on, you want a proxy fight, then lets fight," would create amazing instant value for all the Brookdale stakeholders:
A common enemy is a powerful thing to unite people. This is the gift of an opportunity.
Team members would see in a very visible way, that leadership is protecting them against predatory investors who care nothing about the employees . . . and they don’t.
Family members would know that their interests are being put above profits.
The investment community that is pushing for this stupidity would be humiliated for not caring about people at a time when doing well while doing good is becoming more and more important.
It would be a powerful recruiting and retention tool. It would make me want to continue to work for Brookdale, fighting the evil empire. It would make me want to work for a company that cared about its team members that much. It would make me want to invite my friends to be a part of this “noble cause.”
My guess is a public pushback would increase share price and occupancy faster than anything else they could do. It is a gift if only they are willing to accept it.
And yes . . . it is for good advice like this that they need me on the board.