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Defence contractor Calian appoints new CEO as it nears end of internal review

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  Published in Business and Finance on Tuesday, October 7th 2025 at 18:44 GMT by The Globe and Mail
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Calian Group’s CEO Kevin Ford Stands Firm as Activist Investor Matt Proud Launches a Proxy Battle

A quiet but escalating battle has erupted at Calian Group Inc., a Montreal‑based defence and engineering services company, between the firm’s leadership and an activist investor who has taken a hard line over what he calls a “failed strategy” and “misaligned executive pay.” The dispute, which has now made headlines in Canada’s business press, pits Calian’s long‑time chief executive officer Kevin Ford against 8‑percent shareholder Matt Proud and his investment vehicle, which is pressing for changes to the board, corporate governance, and the company’s broader strategic direction.

The Players and Their Stakes

Calian Group Inc. – Founded in 1978, Calian has grown from a small Canadian technology consultancy to a multi‑national defence contractor that supplies everything from cyber‑security and communications systems to intelligence‑analysis tools for the Canadian Armed Forces and U.S. Department of Defense. The company reported $530 million in revenue for the fiscal year that ended March 31, 2024, up 12 percent from the previous year, and maintains a market capitalization of roughly $1.2 billion.

Kevin Ford – Since taking the helm in 2018, Ford has overseen a strategy of incremental growth through acquisitions and the expansion of Calian’s “Defence & Security” portfolio. In an interview with the Globe and Mail, Ford said the company is “focused on delivering reliable, cost‑effective solutions to our clients, while protecting the interests of our shareholders.”

Matt Proud – A Toronto‑based activist investor with a track record of pressuring Canadian firms on governance and shareholder value, Proud has built a reputation for “hard‑line” campaigns. In a letter to shareholders, he criticized Calian’s board for what he saw as “excessive executive compensation” and a “lack of clarity” on the company’s long‑term strategy.

The Trigger: A Proxy Fight and a Poison Pill

Proud’s letter, released last week, called for a special meeting of shareholders to elect five new directors and to approve a revised compensation plan for the company’s senior executives. Proud’s proposal also seeks a divestiture of Calian’s non‑core “Industrial Services” unit, arguing that the business is a drag on the company’s defensive‑sector growth.

Calian’s board has responded with a “shareholder rights plan” — often called a “poison pill” — designed to dilute any potential takeover or hostile bid. The plan, which the board announced on the same day as Proud’s letter, will allow existing shareholders to purchase additional shares at a discount if any shareholder acquires 15 percent or more of the company’s shares in a single transaction. Ford said in a statement that the board’s move is “necessary to protect the company and its shareholders from a minority investor’s agenda that would hurt the firm’s financial health.”

Legal and Governance Implications

The legal showdown is now on the horizon. Proud’s investment firm has filed a notice of intent to file a lawsuit against Calian, alleging that the company has misrepresented certain financial figures in its latest earnings release. The lawsuit will be filed in the Ontario Superior Court of Justice. The case will likely hinge on a detailed review of Calian’s audited financial statements, the board’s decision‑making process, and the adequacy of the company’s disclosures to the market.

The board’s poison pill has already spurred commentary from Canadian corporate governance experts. The Canadian Securities Administrators (CSA) have reiterated that such plans are permitted under Canadian securities law, provided they are disclosed properly and do not violate shareholder rights. Some analysts have warned that the board’s move could delay the company’s ability to make timely strategic acquisitions, as any potential buyer would need to navigate the rights plan.

Industry Context: Defence Spending and Corporate Governance

The dispute is unfolding at a time of heightened attention to Canada’s defence spending. Prime Minister Justin Trudeau’s cabinet has announced a $10 billion increase in defence procurement over the next four years, which could benefit companies like Calian that supply critical systems and cyber‑security services. The increased demand has already been reflected in Calian’s forward‑looking guidance, with the company forecasting a 15 percent increase in revenue over the next fiscal year.

However, the activist campaign has raised questions about whether Calian’s management is truly positioned to capture that upside. Proud has pointed to the company’s “slow pace” in ramping up its defence portfolio and its perceived reliance on short‑term contracts. He argues that the board should take a more aggressive stance in expanding the company’s capabilities and streamlining executive compensation to align with market benchmarks.

What’s Next?

The company’s board is scheduled to meet on May 2 to discuss the shareholder rights plan and the board’s response to Proud’s proposals. If the board passes the plan, it will be filed with the Ontario Securities Commission within 30 days. Meanwhile, Proud is expected to file his lawsuit in the next few weeks. The two sides have already set a deadline of June 15 for a resolution of the conflict, whether through a negotiated settlement or a court ruling.

In a statement to the Globe and Mail, Ford stressed that Calian’s strategy remains “on track” and that the company is “committed to delivering value to shareholders.” He said he would be “happy to engage in constructive dialogue with Mr. Proud,” but that the board’s priority is to protect the company’s long‑term interests.

Bottom Line

The showdown between Calian’s leadership and activist investor Matt Proud underscores a growing trend in Canada’s corporate landscape: shareholders increasingly wield more influence, especially in sectors deemed strategic, such as defence. While Calian’s board and CEO are poised to defend their strategy and governance framework, the outcome will hinge on how the court views the legality of the poison pill and whether the company can satisfy shareholders who question its compensation and growth plans.

For investors, the dispute will likely have short‑term market implications as the company’s shares dip around the announcement of the rights plan. In the long run, Calian’s ability to navigate the conflict while continuing to capitalize on burgeoning defence contracts will determine whether the company can maintain its position as a key partner to the Canadian and U.S. militaries.

The Globe and Mail will continue to follow the case, providing updates on the board’s decisions, the lawsuit’s progress, and any potential changes to Calian’s board or strategic direction that emerge from this confrontation.