Jana Partners, a value-oriented investment management firm headed by Barry Rosenstein and the largest shareholder of Agrium Inc. (NYSE:AGU) (TSE:AGU) is urging its fellow shareholders to vote for the blue proxy card for its experienced and independent nominees to the company's board during its annual general meeting on April 9, 2013.
In a letter, Jana Partners emphasized that it invested $1 billion in Agrium Inc. (NYSE:AGU) (TSE:AGU) because it has the, “opportunity to unlock substantial unrealized value for all shareholders.” However, instead of embracing the opportunity, the investment management firm claimed that Agrium’s board hid behind stock performance, baseless attacks and distortions, quietly and falsely enhancing the qualifications of its board.
According to Jana Partners, the board of Agrium Inc. (NYSE:AGU) (TSE:AGU) considered its five nominees a slate “Trojan Horse” despite the fact that they can only push for changes by building consensus. He pointed out that his nominees would be a minority in the board.
Jana Partners want to replace five board members of Agrium, which include:
- Frank W. Proto, the longest-serving member of the board for 20 years and never bought a single Agrium stock. He served as chairman of the board until 2012. The investment management firm said that Proto “oversaw the substantial underperformance” of the retail business of the company, and he “does not have legitimate distribution experience.”
- Dr. Susan A. Henry, the second longest-serving board member and bought only 100 shares of Agrium during her 11 years service in the company. She serves on the compensation committee and governance committee of Agrium. Jana Partners claimed that she “prioritized growth at any cost over profitability, and condoned with the company’s scorched earth defense of the status quo and its CEO’s pre-screening of directors for fealty.”
- Derek G. Pannel, chairman of Agrium’s compensation and special committee and has been serving for five years with no legitimate distribution experience.
- Russel J. Horner, served the board for eight years, chairman of the corporate governance committee, member of the special & compensation committees. Never purchased a single stock of Agrium in his entire tenure, and signed off the last minute qualifications of Proto and Pannel. He has no relevant distribution experience and during his term as CEO of Catalalyst Paper, the company suffered quarterly losses, which prompted shareholder to intervene until his departure.
- Mayo M. Schmidt, made $30 million after Agrium acquired Viterra’s retail business, and does not add significant distribution experience to the company.
According to Jana Partners, the above five board members of Agrium Inc. (NYSE:AGU) (TSE:AGU) “embody the lack of relevant distribution experience, passivity in the face of underperformance, lack of shareholder alignment, and entrenchment tactics of Agrium’s board that have caused Agrium to underperform.”
Jana Partners believe that replacing the five members would lift Agrium’s burden without depriving it of necessary experience or company knowledge.