Star Equity Fund announces nomination of director candidates at Gyrodyne

Star Equity Fund (STRR) announced its nomination of two highly qualified director candidates for election to the Gyrodyne (GYRO) board of directors at the Company’s 2023 annual meeting of shareholders. Star Equity Fund said, "We believe significant change to the Board is needed NOW to create value for all shareholders and our nominees will act in the best interests of ALL shareholders… Following the Company’s class action settlement with shareholders in August 2015, Gyrodyne agreed to liquidate its then four-property real estate portfolio, return the proceeds to shareholders, and dissolve the Company. Almost eight years have passed, and the Company has sold only two of those properties, with the completion of the second sale occurring in August 2018 – almost five years ago — while management and the Board have been receiving compensation the entire time. With the Company’s Flowerfield and Cortlandt Manor properties yet to be sold, we have little confidence Gyrodyne will complete its liquidation by its stated YE2024 deadline, which was already delayed two years from the previous deadline. Meanwhile, Gyrodyne shareholders have suffered value destruction during the incumbent Board’s tenure – Gyrodyne’s stock price has declined approximately 32% over the last year and almost 60% over the last five years. We believe the Company effectively has become a compensation vehicle for the incumbent Board at the expense of shareholders. Our main concern is with the Board’s compensation plan tied to the Company’s dissolution process… We believe that the Bonus Plan has warped the incentives of the Board and management, a situation for which we fault the Board. Instead of relying on the Bonus Plan, we believe the Board and management should be incentivized mainly with stock so they can be properly aligned with shareholder interests… In addition to having a classified board, the Company’s advance notice provisions include the following requirements in order to nominate directors and challenge the Board, which we believe are shareholder unfriendly and designed to insulate the incumbent board from accountability to shareholders: a nominating shareholder, to be eligible to nominate directors, must (i) hold at least $2,000 worth, or 1%, of the Company’s Common Shares for at least one year, or (ii) be entitled to cast votes with respect to at least 5% of the Company’s outstanding shares to nominate directors, and a nominating shareholder must satisfy burdensome advance notice requirements, including having its director nominees complete extremely long and invasive questionnaires… It is abundantly clear to us that Gyrodyne’s Board lacks shareholder support. For years, shareholders have endured value destruction and neglect at the hands of a misaligned Board, who receives an egregious 65% of the payout under the Bonus Plan. Gyrodyne’s long-suffering shareholders deserve better, and we aim to give them an opportunity for much-needed change on the Board at the Annual Meeting."