July 17, 2013 / 10:02 PM / 6 years ago

Quality Systems, activist firm reach settlement on board nominees

(Reuters) - Quality Systems Inc said on Wednesday it has reached a settlement with Clinton Group, in which the healthcare IT company will seek to add three of the activist investor’s nominees to its board of directors.

Quality Systems’ board will consist of six company nominees as well as Clinton Group nominees James Malone, Peter Neupert and Morris Panner.

Clinton’s board nominees will be up for election at the company’s shareholder meeting on August 15, Quality Systems said.

Neupert and Panner will also serve on a transaction committee for Quality Systems to evaluate the company’s strategy and direction.

New York-based Clinton Group issued a letter to Quality Systems in June, saying it intended to nominate seven candidates to the board.

Clinton Group then released a proxy statement in early July arguing that while recent regulatory mandates and incentives for the use of digital health records have positively impacted Quality Systems’ peers, “the company has lagged the performance of its competitors and left its stockholders with absolute, and comparatively, disappointing returns.”

Quality Systems’ share price has fallen around 16 percent in the last 12 months. Competitors like Allscripts Healthcare Solutions Inc and athenahealth Inc, meanwhile, have seen shares soar 62 percent and 45 percent, respectively, during the same period.

Clinton Group owns around 1 percent of Quality Systems.

Reporting by Olivia Oran in New York, editing by G Crosse

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