Standard General Issues Letter to the TEGNA Board

Rhea-AI Summary

On March 18, 2021, Standard General, TEGNA Inc.'s largest shareholder, called for a full investigation into a racially insensitive incident involving TEGNA CEO Dave Lougee and Adonis Hoffman. Standard General criticized TEGNA's Board for a brief review that lacked thoroughness, asserting it failed to interview Hoffman or address his serious allegations. They expressed concerns over potential racial bias in TEGNA's management and demanded transparency, urging the Board to stop spreading false narratives regarding Standard General's involvement in the situation.

Positive

• None.

Negative

• Call for a full investigation suggests serious concerns about TEGNA's management conduct.
• Lack of thorough investigation by the Board, which failed to interview the affected party.
• Potential racial bias raised, impacting TEGNA's reputation and diversity metrics.
• Claims of false narratives being spread about Standard General's involvement.

NEW YORK, March 18, 2021 /PRNewswire/ -- Standard General L.P., the largest active shareholder of TEGNA Inc. (NYSE: TGNA), issued the following letter to the TEGNA Board calling for a full investigation into the racially insensitive incident involving TEGNA CEO Dave Lougee.

Dear TEGNA Board of Directors,

We are writing to reiterate Standard General's call for a full investigation into the racially insensitive incident involving Adonis Hoffman and TEGNA CEO Dave Lougee. In addition, we demand that Mr. Lougee and TEGNA cease the spread of false narratives related to the incident that they have undertaken in recent weeks. This letter follows our previous letter on March 9 when we asked the Board to conduct a full investigation.

After Mr. Hoffman provided a written account of the racially insensitive incident involving Mr. Lougee to Tegna and to us on March 3, we asked the Board to conduct a thorough, independent investigation into this incident and the conduct of Mr. Lougee. 

It did not. In fact, it appears that the Board's review had already concluded - over the space of just a few days after the Board received Mr. Hoffman's account. This "review" consisted of an outside law firm conducting one interview with Dave Lougee, a file review, and interviews with Mr. Lougee only by Board members and the General Counsel.

Mr. Hoffman's account raised serious concerns regarding potential racial bias in the C-suite of one of the nation's leading media companies that serves local communities across the United States. Whether it turns out that these incidents with Mr. Hoffman were an aberration or part of a larger record of problematic conduct, the investigation raises red flags.

• At no point did anyone speak to or reach out to Mr. Hoffman, the wronged party in this incident and in subsequent encounters with Mr. Lougee.
    
• At no point did Mr. Lougee offer an apology to Mr. Hoffman, which, subsequently, Mr. Lougee made false claims about.
    
• When asked by a media publication why the Board didn't reach out to Mr. Hoffman, a "source close to TEGNA" stated "Lougee had not disputed the incident, so the facts were not an issue. As to an offer to compensate Hoffman over the incident, the source said the company was convinced that did not happen." That statement claims that no facts were in dispute and then proceeds to dispute those very facts. The board cannot know the facts without talking to the wronged party, which is why we are calling for this investigation.
     
• In Mr. Lougee's letter to employees he suggests that he "ran into Mr. Hoffman and mistakenly thought he was a hotel valet." However, per Mr. Hoffman's account, which was released publicly, Mr. Lougee sat one seat away from Mr. Hoffman at the head table at an industry event and conversed with him over lunch immediately prior to the incident.
    
• Mr. Lougee's recounting of the incident is inconsistent with how the event actually transpired and omits critical details provided by Mr. Hoffman.

In the face of these red flags, we do not understand how the Board reached the conclusion that this "review" met the basic requirements of the Board's fiduciary duty. Moreover, we continue to question how this could reflect deeper biases present in upper management, particularly in view of data indicating that TEGNA lags on key diversity metrics. The focus of the investigation the Board conducted appears to have been to exonerate Mr. Lougee as quickly as possible. The Board's duty is to shareholders, not to Mr. Lougee.

We also ask that TEGNA cease spreading false rumors to the investment community and media that Standard General planned this occurrence. We did not know this incident had occurred when we nominated Mr. Hoffman and three other directors on January 21, 2021. Mr. Hoffman first notified us of the incident privately on February 23, 2021. Mr, Hoffman notified us he was withdrawing from consideration -- and provided us his letter of withdrawal -- at the same time he notified the TEGNA Board on March 3, 2021. Attempts to portray Standard General as the engineer of a scandal that is of Mr. Lougee's making are inconsistent with the avowals of Mr. Lougee and the TEGNA Board that they regret this incident and take concerns about racially insensitive conduct seriously.

To conclude, we expect the Board to conduct a full investigation into the incident involving Mr. Lougee and Mr. Hoffman and the broader issues the incident raises.

Regards,

Soo Kim
Founding Partner
Standard General L.P.

On March 17, 2021, Standard General, L.P., together with the other participants named below, filed a preliminary proxy statement and accompanying WHITE proxy card with the Securities and Exchange Commission ("SEC") in connection with the solicitation of votes for the election of directors at the 2021 annual meeting of TEGNA.

STANDARD GENERAL STRONGLY ADVISES ALL STOCKHOLDERS OF TEGNA TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS FILED BY STANDARD GENERAL WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION. THE PRELIMINARY PROXY STATEMENT AND STANDARD GENERAL'S OTHER PROXY MATERIALS ARE AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. The participants in the proxy solicitation are anticipated to be Standard General, Standard General Master Fund L.P., Soohyung Kim, Stephen Usher, David Glazek, Daniel Malman and Amit Thakar and Standard General's nominees Colleen Brown, Carlos P. Salas and Elizabeth A. Tumulty.  Stockholders are urged to read the preliminary proxy statement for further information about the nominees and the other participants in the solicitation.

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SOURCE Standard General

FAQ

What did Standard General request from TEGNA regarding CEO Dave Lougee?

Standard General requested a full investigation into a racially insensitive incident involving CEO Dave Lougee.

What were the concerns raised by Standard General about TEGNA's Board?

Concerns included the Board's insufficient review process and failure to interview the affected party, Adonis Hoffman.

What date did Standard General issue their letter to TEGNA's Board?

Standard General issued their letter on March 18, 2021.

What incident triggered Standard General's call for an investigation?

The incident involved racially insensitive remarks made by TEGNA CEO Dave Lougee towards Adonis Hoffman.

How did Standard General respond to the Board's review of the incident?

Standard General criticized the Board's review as inadequate and pointed out the lack of an independent investigation.

What is the significance of the date January 21, 2021, mentioned in the press release?

On this date, Standard General nominated Adonis Hoffman and three other directors to TEGNA's Board.