By Jack Cumming
As I write this, I’m sitting with two large bundles of verbiage topping my desk towers (towers of untended paperwork). Both tower toppers relate to the Brookdale Annual Meeting, now scheduled for July 11, 2025.
Blue or White?
One bundle includes, “Vote ‘FOR’ only the eight company nominees listed on the accompanying BLUE proxy card.” It’s written in bold type. The other bundle exhorts, “We urge you to … support our efforts by signing, dating, and returning the enclosed WHITE universal proxy card today.”
The WHITE folks add, “If you have already voted for the incumbent management slate on the company’s universal proxy card, you have every right to change your vote by signing, dating, marking your vote, and returning a later-dated WHITE universal proxy card or by voting in person at the Annual Meeting.”
Customers Omitted
Lots of words all about money with little or no mention of the residents and their families who pay the money with which these two adversarial management teams hope to enrich themselves. There is much talk of “shareholder value,” but little evidence of business value. Business value comes from satisfied customers whose loyalty enhances reputation and builds a business. Growth generally outperforms margins.
The evidence is considerable that Brookdale is not serving its customers well. It has struggled with occupancy, a measure often used to gauge resident satisfaction or dissatisfaction. Occupancy has languished well below industry norms. Clearly, current management has not done well with its stewardship.
BadCo, GoodCo, BadAssCo
The new, clever money crew proposes ranking properties by occupancy and selling or “monetizing” “BadCo” (below 75% occupancy) communities, shrinking Brookdale into a smaller “GoodCo” (above 75% occupancy) enterprise. Neither is very constructive. Obviously, most of the rest of the industry knows how to bring both “BadCo” and “GoodCo” properties up closer to 90% or better occupancy. They’re doing it.
Focusing on occupancy would be good for customers, good for the company, and good for shareholders … very good for shareholders. Yet, neither current management nor the usurpers care enough about people to think much about what might attract customers and make them satisfied. Has business really become this self-serving? This contest of the greedy dragons makes Adam Smith seem altruistic.
Greed
We live in an era in which greed, self-aggrandizement, and self-deification are often on display. Hollywood gives us the telling quote that applies here: “… greed for lack of a better word is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed in all of its forms, greed for life, for money, for love, for knowledge has marked an upward surge of mankind …”. [Source]
I disagree. I think we can be better than this. Humans are gregarious and communal. Vultures are not. They swoop in with destructive intent. Brookdale should have nothing to do with vultures.
The Lesser Evil
The shareholders of Brookdale now face two unappealing alternatives. We’ve been here before. How often do we have to vote for the lesser evil as our nation, or in this case, our company, suffers and loses face? Yes, Brookdale needs new life and a new commitment.
Vulture capitalism is not Brookdale’s best future. Read the qualifications of the two slates of directors that are proposed as qualified to oversee this great trust of a business. Most are money denizens, investors of wealth of one form or another. But, Brookdale is a people business, and it needs a people person of astute perception and understanding to lead it forward.
This doesn’t require the lengthy, stultifying process-laden busywork of a six-month search by Spencer Stuart. It requires a wise board with members of high character, versed in the humanities of people, a board with ethical and moral standards to match. Is that so rare and improbable in our America of 2025?
Facing this election at such a sad time with such limited choices is devastating. America needs a respectable Brookdale, not just a money machine to enrich those who value money before people. We need leadership of stature, not the only option being to choose the lesser of two evils.
Disclaimer: I bought Brookdale shares at $37, and the price now is below $7, so if Brookdale were to rise to more than five times its current value, I might have a chance of benefiting from my investment.
