Gyrodyne and Star Equity Fund Reach Governance Agreement Resolving Board Disputes

Gyrodyne, LLC has entered into a significant governance agreement with Star Equity Fund, LP that resolves previous disputes and establishes new parameters for board composition and compensation. Under the terms of the agreement, Star Equity Fund has withdrawn its slate of nominees for election at the 2025 annual shareholders meeting, signaling a collaborative resolution to what had been contentious governance discussions.

The agreement mandates a reduction in Gyrodyne's board size from five to four directors while implementing a freeze on director compensation. Notably, the arrangement limits the aggregate fee paid to the Chairman to $65,000, addressing shareholder concerns about executive compensation. Richard Smith will be the sole nominee standing for election at the 2025 annual shareholders meeting as part of the board reduction process.

Star Equity has agreed to customary standstill provisions that typically restrict activist investors from pursuing additional proxy contests or other shareholder actions for specified periods. This provision provides stability for Gyrodyne's leadership while ensuring shareholder interests remain protected through established governance channels.

Gary Fitlin, Gyrodyne's President and Chief Executive Officer, emphasized the company's appreciation for shareholder input, stating that perspectives from Star Equity and the broader shareholder base have strengthened efforts to complete property sales and deliver maximum value to shareholders. Jeff Eberwein, manager of Star Equity Fund, expressed satisfaction with the collaborative approach, noting that recent discussions with the company resulted in governance enhancements that better align with shareholders' interests.

The full agreement with Star Equity will be filed in a Current Report on Form 8-K with the Securities and Exchange Commission, providing complete transparency to all stakeholders. Additional information about the Company may be found on its web site at https://www.gyrodyne.com.

These governance changes occur as Gyrodyne continues its strategic focus on value-enhancing entitlements for its properties, including a 63-acre site on Long Island and a medical office park in Cortlandt Manor, New York. The resolution allows management to concentrate on executing these real estate development strategies without the distraction of ongoing governance disputes.

Nader Salour, Chairman of Gyrodyne's Nominating Committee, acknowledged the departure of Paul Lamb from the board after 28 years of service, describing his leadership as instrumental during periods of challenge and transformation. While Lamb will not stand for re-election, he remains a significant shareholder and will continue to support the company's long-term success.

The agreement reflects evolving standards in corporate governance where companies increasingly engage with activist investors to find mutually acceptable solutions that balance shareholder interests with long-term strategic objectives. For business leaders and investors, this case demonstrates how constructive dialogue between management and shareholders can lead to governance improvements that enhance transparency and align interests without resorting to costly proxy battles.