Boardroom Battle: Activist Investor Gains Momentum
A crucial victory has been scored by Mantle Ridge, an activist investor, in its quest to reshape the board of industrial gases giant Air Products and Chemicals. On Monday, Institutional Shareholder Services (ISS), a prominent proxy advisory firm, threw its weight behind three of Mantle Ridge’s four director candidates, urging investors to elect them to the company’s nine-member board.
A Call for Change
Mantle Ridge’s campaign centers around the need for a strategic overhaul and a succession plan for Air Products’ octogenarian CEO, Seifi Ghasemi, who has been at the helm for over a decade. The activist investor argues that the company must reassess its capital allocation and scale back on high-risk projects. ISS shares these concerns, citing the board’s inadequate oversight of strategy and succession planning.
Expertise and Experience
ISS has endorsed Mantle Ridge’s founder, Paul Hilal, former industry executive Dennis Reilley, and Andrew Evans, citing their skills and experience as essential in addressing the company’s pressing issues. A reconstituted board, ISS suggests, must prioritize de-risking project commitments, evaluating underperformance, and developing a credible succession plan.
Air Products Pushes Back
Air Products, however, remains defiant, warning shareholders that the election of any Mantle Ridge nominee could create “extraordinary confusion” about the company’s direction and leadership. The company claims that appointing new directors would hinder its ability to deliver long-term shareholder value.
A New Era of Governance
Hilal has welcomed ISS’s recognition of the need for change, emphasizing the importance of new directors in conducting a genuine CEO succession process. As the battle for board seats intensifies, one thing is clear: the fate of Air Products and Chemicals hangs in the balance. Will investors heed the call for change, or will the status quo prevail?
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