Rakon says it shares the frustration of the Shareholders Association, which is calling for sweeping board and management changes at the technology manufacturer.
In a statement sent to media on Sunday night, the investor group said it would oppose the re-election of executive director Darren Robinson at the firm's annual meeting on September 16.
The association also said Rakon chief executive Brent Robinson was "not the right person" for the job and the position of chairman Bryan Mogridge was "up in the air".
In response, Mogridge said the company shared the frustration with recent results and remained fully committed to expanding and diversifying the business.
"We regularly engage with our shareholder base on a range of issues, including governance and company structure, and value their perspective," he said.
Shareholders Association chairman John Hawkins said the "final straw" for a number of shareholders was the more than 20 per cent pay increases received by the Robinson brothers in the last financial year.
Investors were fed up with the board dominance of the Robinson family, which owns roughly 23 per cent of the company, Hawkins said.
Members of the family - Brent and Darren, as well as their father Warren - occupy three of Rakon's six board seats.
Hawkins said the association found it difficult to understand how an executive in charge of sales, Darren Robinson, could be properly held to account given his seat on the board and family ties to other directors.
Rakon's financial performance had been "dismal" over the last five years with only one annual profit of $3.2 million in a "sea of red ink" totaling $118.7 million, he said.
Hawkins said the association accepted that circumstances had been difficult for Rakon.
But many of its problems were self-inflicted, including the firm's disastrous foray into Chinese manufacturing, he said.
Brent Robinson received a 24 per cent increase in his total remuneration in the last financial year, to $907,892, while his brother enjoyed a 22 per cent increase to $734,605.
Rakon need to rapidly move to obtain another two independents [directors] and in our view founder Warren Robinson should also voluntarily stand down.
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Hawkins said the pay increases were "outrageous".
The company had promised at its 2012 AGM to keep a lid on director and executive pay until Ebitda of $25 million had been achieved, which hadn't happened.
"In our view a freeze is a freeze and Rakon's latest plunge back into loss showed there was no reason for a thaw."
Hawkins said the association was confident that Rakon shareholders would vote for change.
"That is only the first stage," he said. "Rakon need to rapidly move to obtain another two independents [directors] and in our view founder Warren Robinson should also voluntarily stand down."
He said Brent Robinson was strong on technology but the track record suggested he wasn't the right person to be CEO.
"We think a stronger and more realistic commercial focus is essential and this will inevitably result in a reshuffle of responsibilities."
Hawkins said that while Mogridge's position was under question, the association was reluctant to create a situation that left the firm rudderless and in breach of NZX rules.
"We expect to see him outline a strategy that is in the best interests of all shareholders, rather than the Robinsons," he said. "If he can do so, we will consider supporting him while changes are made, but it is inevitable that the board in a year or two will need to be different than the current one."
Hawkins said the association would shortly be writing to all Rakon shareholders seeking proxy support.
Rakon shares, which soared as high as $5.67 soon after the firm's 2006 initial public offering, recently traded at 22.5c.