Transat AT gets support from proxy adviser ISS

Executive Summary

• Institutional Shareholder Services (ISS), a leading independent proxy advisory firm, has recommended that shareholders vote "for" all eight of Transat AT Inc.'s director nominees and "against" all dissident shareholder proposals submitted by Financiere Outremont Inc. at the upcoming Annual General and Special Meeting of Shareholders.
• ISS validated Transat's turnaround strategy, citing significant improvements in operating metrics, key performance indicators (KPIs) compared to aviation peers, and a strengthened balance sheet following the restructuring of LEEFF debt.
• The recommendation aligns with fellow adviser Glass Lewis and is supported by two major long-term shareholders, FTQ and La Caisse de depot et placement du Quebec, who have entered into support and voting agreements to back Transat's nominees.

Key Details

• Proxy Recommendation: ISS recommends voting "for" all 8 Transat director nominees and "against" or "withhold" from all proposals by Financiere Outremont Inc.
• Meeting Details: The Annual General and Special Meeting of Shareholders is scheduled for March 10, 2026, at 9 a.m. Montreal time.
• Voting Deadline: The blue proxy must be voted by Friday, March 6, 2026, at 9 a.m. Montreal time.
• ISS Rationale - Operational Performance: ISS noted that "most operating metrics appear to have strengthened since the Elevation Program was introduced" and that Transat's KPI trends compare favorably to aviation peers.
• ISS Rationale - Financial Progress: The firm highlighted that Transat "strengthened the balance sheet by restructuring the LEEFF debt," a decision described as "exceptionally well received by the market."
• ISS Rationale - Dissident Rejection: ISS rejected the dissident case, stating the dissident "has not made a compelling case for board change" and relied on "unsubstantiated" arguments.
• Dissident Motive Identified: ISS noted that the dissident's proposed board composition (50% of seats plus the chair) could serve as a "beachhead to facilitate an eventual acquisition" by Financiere Outremont.
• Shareholder Support: Major long-term shareholders Fonds de solidarite des travailleurs et travailleuses du Quebec (FTQ) and La Caisse de depot et placement du Quebec have committed to voting for all Transat nominees.
• Other Proposals: ISS also recommended voting in line with the board's unanimous recommendations on the amendment to articles of incorporation to set the board size between 8 and 15 directors.

Notable Quotes

• ISS on Performance: "There have been significant improvements over the past three fiscal years, and key performance indicators tell the story of a company that is moving in the right direction."
• ISS on Dissident Case: "The dissident has not made a compelling case for board change... The dissident has failed to present a case for any degree of change, let alone for half of the board."
• ISS on Dissident Motive: "The dissident has long aspired to acquire [Transat], and that the proposed board composition -- 50 percent of board seats plus the board chair --could serve as a beachhead to facilitate an eventual acquisition."