Activist investor Mantle Ridge has secured the backing of Institutional Shareholder Services (ISS), a prominent proxy advisory firm, in its campaign to gain board seats at industrial gases giant Air Products and Chemicals. This endorsement strengthens Mantle Ridge’s push for strategic changes and a CEO succession plan. ISS recommends Air Products investors elect three of Mantle Ridge’s four director nominees to the nine-member board.
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ISS Backs Mantle Ridge’s Call for Change at Air Products
ISS joins Glass Lewis in supporting Mantle Ridge’s efforts to reshape Air Products’ leadership. Last week, Glass Lewis urged investors to elect all four of Mantle Ridge’s nominees. The upcoming annual meeting on January 23rd will be pivotal in determining the company’s future direction. ISS specifically endorsed Mantle Ridge founder Paul Hilal, former industry executive Dennis Reilley, and Andrew Evans. The report also recommended withholding votes for CEO Seifi Ghasemi, lead director Edward Monser, and Charles Cogut.
Air Products has expressed strong disagreement with ISS’s opinion, while Mantle Ridge welcomed the support. The activist investor argues that the company needs a clear succession plan for its octogenarian CEO, who has led the company for a decade. Additionally, Mantle Ridge advocates for a revised capital allocation strategy and a reduction in high-risk projects.
Succession Planning and Strategy at the Forefront of the Dispute
ISS echoed Mantle Ridge’s concerns, highlighting the board’s oversight of the company’s strategy and succession planning for Ghasemi as key areas needing improvement. The report emphasized the need for a reconstituted board to prioritize de-risking existing projects, addressing underperformance, restoring investor confidence, and implementing a robust succession plan. ISS believes Mantle Ridge’s nominees possess the necessary skills and experience to assist the board in tackling these challenges.
Air Products has cautioned shareholders that electing any of Mantle Ridge’s nominees could lead to significant uncertainty regarding the company’s leadership and strategic direction. The company maintains that such a move could hinder its ability to deliver long-term shareholder value. However, Hilal reiterated Mantle Ridge’s belief in the necessity for change, emphasizing the need for new directors to oversee a comprehensive CEO succession process.
Proxy Advisory Firms Influence Investor Decisions
The recommendations of proxy advisory firms like ISS and Glass Lewis carry significant weight in corporate elections. Many investors rely on their guidance when voting on critical issues, including board composition. This makes ISS’s endorsement of Mantle Ridge a considerable advantage for the activist investor in its ongoing battle with Air Products. The outcome of the January 23rd annual meeting will have significant implications for the future of the company.
Conclusion: The upcoming Air Products annual meeting promises to be a closely watched event. With ISS now backing Mantle Ridge’s push for change, the pressure on Air Products’ leadership to address concerns regarding strategy and succession planning intensifies. The vote will ultimately determine whether the company embraces a new direction under the influence of activist investors.
