CPI Corp.

The preliminary count indicates that the incumbents of CPI have prevailed over the challenge from Ramius.

CPI is the operator of the PictureMe Portrait Studios, which canbe found in Sears and WalMart locations.

Ramius had nominated Peter Feld and Joseph Izganics, and has complained that the company's current board is too much under the influence of Knightspoint Partners.

On Wednesday, the shareholders voted for the company slate of James Abel, Paul Finkelstein, Michael Glazer, Michael Koeneke, David Meyer and Turner White. All but Finkelstein, who is a new nominee, and Glazer, who joined the board last year, have served on the board since 2004.

Feld has tried to put the usual good face on this. "At the end of the day, the company is stronger than it was before our investment," he said. "We were an active shareholder and board member for five years and we did make substantial changes."

Andrew Freedman, a lawyer for Ramius, has a less sportsmanlike take. The "record daye" was May 9, i.e. anyone who owned shares as of that date were eligible to vote, but Freedman said a confusing process may have put ballots in the hands of people who acquired shares after that date. “We see the potential for double voting.” So we may hear more of this matter yet.

Ramius makes its case

I spoke last week about CPI Corp., and its planned stockholders' meeting July 8 (Wednesday).

Today I wish only to add that this is the case that Ramius is making. It objects to the fact that Turner White chairs the compensation committee, and that James Abel chairs the Nominating and Governance Committee.

Turner White, in particular, Ramius claims, has:

* No retail experience
* Limited financial experience
* Is a Knightspoint recommended director (a bad thing itself in their view)
* and as head of the Comp Committee has proposed and supported exorbitant compensation packages.

In general, the "outsized and undue influence" of Knightspoint supposedly throws into question "all aspects of the company's corporate governance."

CPI is arguing that Ramius has tried to force a desperation sale of the company. Ramius replies that this is "highly misleading," a phrase that usually means "not entirely wrong."

CPI Meeting, July 8

CPI Corp., a Missouri-based photography-services concern, hosts its shareholders meeting one week from today.

Its largest shareholder is Ramius LLC, which owns 23% of the equity and controls one board seat.

CPI's chairman, David Meyer, through his own investment firm, Knightspoint Partners, controls 1.5%, and two board seats.

A story in the St Louis Business Journal yesterday offers a scorecard.

The company is traded on the New York Stock Exchange (CPY). As you can see above, ithas a very dramatic looking price chart. Until the credit crunch of last autumn it was trading in a range between $14 and $18. About the time Lehman Bros declared bankruptcy in mid-September, CPI's price began a serious slide that took it down to $6. Then in mid October it recovered a good deal of that ground, which it lost again by the end of the month.

All that was but a bag-of-shells compared to the collapse of November, though. Through late Novemver and early December it was trading below $2.

the story since then has been one of recovery. So why the proxy fight? We'll talk Sunday.