Fired AlarmForce CEO fighting his ouster
TORONTO—The recently ousted CEO of AlarmForce Industries, one of Canada’s largest security companies, said he’s planning a legal strategy designed to replace the board members who fired him.
“I’m working on getting rid of the existing board,” said Joel Matlin, who also founded the company, based here, 25 years ago. He told Security Systems News that he’s working with his legal team to hold a proxy vote that he believes will result in getting a new board in place.
His termination as CEO and president—which came on July 23 after a unanimous vote of the company’s five-member Board of Directors—was the result of “a mutiny created by my CFO, Anthony Pizzonia,” Matlin told SSN.
Pizzonia, a board member who is now interim CEO for the company as it searches for a permanent replacement for Matlin, did not return requests for comments by SSN’s deadline. Pizzonia has been with AlarmForce since 1992 and on the board since 2004, according to Reuters.
Matlin said he had handpicked members of the board for their seats. Now, however, he said, “The issue is we have fundamental differences in the direction of the company. My direction is to grow the company, and I’m not quite sure what their direction is.”
The board had only cordial things to say about Matlin in a news release last week. The release was issued after Matlin resigned from the board of the publicly traded company one week after his job with the company was terminated.
“The board wishes to acknowledge Mr. Matlin's instrumental role in founding and developing AlarmForce into one of the leading providers of security services in Canada, and wishes to thank him for his numerous contributions to the board,” the July 31 release stated.
Despite his dismissal, Matlin continues to appear in the company’s television and radio commercials, according to The Gazette, a Montreal-based newspaper.
Matlin founded AlarmForce in 1988 and retains a stake of about 8 percent in the company. AlarmForce provides security alarm monitoring, PERS, video surveillance and related services to residential and commercial customers throughout Canada and in the United States, in Florida, Ohio, North Carolina, Georgia, Kentucky and Minnesota. AlarmForce also is a leading provider of two-way voice alarm systems in Canada.
Matlin said the company has about 150,000 accounts and about $4 million in RMR and that its growth has been strictly organic. “The company has shown nothing but profit over the last five years. It’s probably one of the best growing alarm companies in North America, with zero debt,” Matlin said.
According to The Gazette, “The company nearly doubled its net income in the quarter [that] ended Jan. 31, as it gained subscribers and reduced marketing costs.”
Now, Matlin told SSN, he’s working with his legal team to hold a proxy vote to replace the current board. “That means because of the amount of shares that I own, I’m allowed to petition the company to hold a shareholder meeting,” Matlin explained. “And at that meeting, shareholders will vote for either my slate [for a new board of directors] or the existing directors.” He added, “At the present time, I do have some support from major shareholders.”
The company will set the date of the meeting after it receives the petition, he said. “If it was up to me, the date would be tomorrow,” Matlin told SSN.
He said he has never been involved in a proxy battle, but added, “I’m very confident that it will be successful.”
Matlin was also chairman of the company and a member of the board of AlarmForce even after his termination, but he resigned from that body on July 30. He said he quit the board at the advice of his legal team as he works on his strategy. “I didn’t want to be associated with the board,” Matlin told SSN.
In addition to the recent shake-up at the top, AlarmForce during the past year has also been exploring a possible sale of the company as part of a strategic review begun last August.
Just a few weeks before Matlin’s ouster, on July 3, the company announced that its board had ended the review without a sale because it concluded the “process did not result in a transaction adequately reflecting the company's value.”
Instead, the company said, the plan going forward would be to focus on growing AlarmForce.
Matlin said he can’t discuss details of the strategic review but said he gained from it “amazing insight on how to grow the company bigger.”
He said he had scheduled a “vision meeting” with the board for Aug. 7. “We were going to review the vision of the company and where we were going to bring the company in the next fiscal year,” he told SSN. “And the board didn’t even have the decency to come to that meeting. They fired me in advance of that meeting. In other words they took a very ignorant approach, without even knowing what was planned.”
Matlin said board members on July 23 asked him for a “prevision meeting” and then showed up and abruptly terminated his job. “They thanked me for my years of service,” he said with a wry chuckle.
He said they did not give a reason why they were ousting him. “They also suspended my son, who was a key player on the marketing team. We ran our own in-house advertising agency,” Matlin said.
He said the board includes a lawyer, “an investment guy, and one is a consultant … none of them are marketing guys at all.” He added, “I think certainly now you have the financial guys running the company, certainly not the marketing guys.”
SSN continues to report on this story.