Ashland makes board changes in fight against ‘activist’

Speciality chemicals giant Ashland has announced that, in consultation with one of its largest shareholders, the independent investment manager Neuberger Berman, it will add two new independent board members – yet to be found - and appoint a lead independent director and new board committee chairs at its annual meeting on 8 February. This is part of an ongoing battle against ‘activist shareholder’, Cruiser Capital Master Fund, which has seeking to replace four directors with its own nominees.

Plans are for Bill Wulfsohn, who Cruiser wants to replace, remaining as chairman and CEO and no expansion of the current board of 11. Among those nominated are: Jay Ihlenfeld, a current director, as lead independent director, with Barry Perry having announced his retirement in December; Mark Rohr, former CEO of Albemarle as chair of the governance and nominating committee; and Craig Rogerson, former CEO of Chemtura and now CEO of Hexion, to the compensation committee under Kathleen Wilson-Thompson, a senior executive at Walgreen Boots.

Neuberger Berman, which owns 2.8% of Ashland, said that it would vote for the company slate, adding that it will continue to “communicate our views on capital allocation and incentive compensation design in an effort to further align and reward decision making that maximises long-term value for Ashland’s enviable asset base”. Cruiser, which owns 2.5%, said that it would study the proposal, adding “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.”

In an open letter shareholders, Ashland said that it is “making great progress as we transform into a leaner, more cost-competitive and growth-oriented specialty chemicals company”, as proved by its 2018 results. During this year, it said, adjusted diluted earnings grew by 47%, while net income quadrupled to $114 million and adjusted EBITDA by 20% to $683 million and sales by 15%, to $3.74 billion, with double-digit sales growth in all three reportable segments.