An activist investment firm locked in a proxy fight with Comtech Telecommunications Corp.'s incumbent management is balking at the company's succession plan announced Tuesday.
On Wednesday, Manhattan-based Outerbridge Capital Management LLC issued an open letter to the Melville company's board of directors that questions a plan to elevate president and chief operating officer Michael Porcelain to the role of chief executive by year's end.
"After all," the letter said, "Mr. Porcelain and outgoing CEO Fred Kornberg have failed to create value for Comtech shareholders over the span of not just years, but decades."
The letter also said that Melville-based Comtech "has consistently misled shareholders regarding its engagement with Outerbridge," citing "continuous delays, and, at times, an open belligerence from Mr. Porcelain himself."
In addition, Outerbridge faulted Comtech's "flawed" merger-and-acquisition strategy from fiscal year 2016 through 2021.
A Comtech spokesman, responding to the Outerbridge letter, said Wednesday that the company "maintains regular dialogue with investors, and we are focused on executing our strategic plan to create long-term value for shareholders."
Shares of Comtech fell 1% to close Wednesday at $22.40. The shares dipped an additional 1% in after-hours trading.
Once Porcelain, 52, becomes CEO, Kornberg, 85, is expected to become nonexecutive chairman of the board and an adviser on technology matters, according to Comtech's Tuesday announcement.
Outerbridge and its affiliates holds about 4.95% of Comtech's outstanding common shares.
The investment firm initially approached Comtech's board of directors in June.
In September, Outerbridge announced the nomination of three independent candidates to the board.
"Outerbridge believes Comtech’s long history of failure is due above all to a board that is seemingly incapable of overseeing management," the investment firm said in Wednesday's letter.
Comtech, with about 180 employees in Melville and roughly 2,000 worldwide, makes emergency 911 systems and satellite earth stations and provides cybersecurity training to the Defense Department and other agencies.