By Svea Herbst-Bayliss

NEW YORK (Reuters), a proxy adviser Institutional Shareholder Services advised US Foods Holdings shareholders to vote for three out of the five nominees from Sachem Head Capital Management. The firm believes it would be better if there was “closer oversight”

“The dissident has presented a case for reform, and the issues identified warrants the addition of three nominees from the dissident community who can contribute supply chain experience and executive experience to shareholders directly, represent shareholders and have strong public boards and industry experience.” The report was written by ISS.

ISS backed Scott Ferguson who is the founder of Sachem Head, and James Barber as well Jeri Finnard for being elected to the board. The company will now have eleven members.

With an 8.7% share, Sachem Head holds the largest stake in US Foods. He has invested in US Foods since 2018.

Ferguson started pushing for change last year. He stated that he feels the company is behind its peers and has not made improvements as promised.

Although the initial plan was to replace seven of the directors by the hedge fund, it eventually lost control and added two more independent directors.

Sachem Head had requested two Board seats from the company in settlement of their disagreement. ISS stated that two seats on the board “may not be sufficient to bring about change.” It also said “With three, there’s a pathway for dissident directors seeking support from a majority,”

The representatives of US Foods & Sachem Head were unable to respond immediately to inquiries for comment.

Company’s Annual Meeting is set for May 18.