Ashland to Make Board Changes as Shareholders Apply Pressure
Ashland Global Holdings
locked in a proxy struggle with an activist investor, struck a maintain a unique, usually quiet investor to upload two new administrators and make different adjustments.
Ashland Chief Executive Bill Wulfsohn and Neuberger Berman Group LLC, a 2.eight% shareholder, instructed The Wall Street Journal on Sunday that they agreed to a plan through which the specialty-chemicals corporate will to find and upload two new administrators after its annual assembly, refresh management of its board committees and feature an established director step down.
Hedge fund Cruiser Capital Advisors LLC, which owns 2.five% of Ashland, nominated 4 administrators to Ashland’s board in October, in search of to oust 4 present administrators, together with person who will step down as a part of the brand new plan. Cruiser additionally recommended shareholders now not to re-elect Mr. Wulfsohn as chairman at Ashland’s annual assembly slated for early subsequent month.
Cruiser mentioned in a remark Sunday that it’s going to evaluation Ashland’s announcement, “however on the surface we believe no responsible shareholder would want to effectively vote for nearly 20% of the Company’s independent directors without knowing who they are—this sounds like poor corporate governance.”
Under the plan with Neuberger, Mr. Wulfsohn will stay chairman, however present director Jay Ihlenfeld might be appointed lead impartial director.
The reimbursement and governance board committees gets new leaders and director Michael Ward will step down after the primary new director joins.
Ashland will make a decision at the two new administrators with enter from Neuberger and different shareholders, but it surely doesn’t be expecting to imagine Cruiser’s nominees.
It is unclear whether or not the adjustments might be sufficient to suggested Cruiser to withdraw its slate, which incorporates former Union Carbide Corp. CEO Bill Joyce and previous Hercules Inc. Chief Financial Officer Allen Spizzo. Cruiser and Ashland had proven no indicators of nearing a agreement, doubtlessly putting in place the proxy struggle to be probably the most first of the 12 months to cross all of the approach to a shareholder vote.
“The goal here was to try and put this to bed, but the shareholders will decide,” mentioned Charles Kantor, the Neuberger Berman senior portfolio supervisor who devised the plan with Ashland. “We thought this outcome was significantly superior than the execution risk, the distraction risk and the nastiness of the alternatives.”
Mr. Wulfsohn mentioned Neuberger approached him remaining week and that fresh conversations with different shareholders additionally factored into the plan. He mentioned the corporate has welcomed Cruiser’s enter previously when it added a board member on their advice however didn’t make stronger their applicants this time.
Ashland, which makes elements for merchandise as various as shampoos and tablet pills, has been underneath drive from shareholders. Cruiser had driven Ashland to extend its cost-cutting program and enhance margins, and mentioned it used to be involved that the corporate, based totally in Covington, Ky., would promote itself for an extremely low worth earlier than making the adjustments. Cruiser additionally has criticized Ashland’s corporate-governance practices.
It used to be uncommon for energetic cash managers such as Neuberger Berman to publicly agitate for trade on the corporations they grasp, in part as a result of shareholder activism used to be as soon as thought to be unseemly and, in contrast to index finances, they may be able to promote positions they don’t like. But as more cash flows into index finances, energetic managers are more and more adopting activist ways to force returns and justify their upper charges.
This is most effective the second one time that Mr. Kantor, who oversees greater than $five billion of Neuberger Berman’s $315 billion underneath control, has publicly lobbied for trade at one among his portfolio corporations, regardless that he infrequently will get concerned at the back of the scenes. His first such strive happened when he lobbied for Whole Foods to promote itself.
in the end received the grocery chain.
Write to Cara Lombardo at [email protected]