Reminds Shareholders that the Incumbent Board
Awarded Ex-CEO Denise Morrison $60+ Million Over 7 Years Despite
the Company’s Share Price Stagnation and Numerous Strategic
Blunders that Occurred on Her Watch
Questions the Decision to Install Board Member
Keith McLoughlin as Interim CEO and Pay Him Almost $4 Million to
Hold the Wheel While Campbell Takes Its Time Finding a Permanent
Leader
Highlights Enormous Executive Pay Even While
the Company’s Shares Are Down 20% This Year Alone
After Considering the Current Board’s History
of Destroying Your Value, We Urge Shareholders to VOTE THE WHITE
CARD to Elect the Independent Slate and End This Reign of Error
Third Point LLC (LSE: TPOU) ("Third Point"), a New
York-based investment firm managing approximately $17 billion in
assets and a holder of approximately 7% of the outstanding common
shares of Campbell Soup Company (NYSE: CPB) ("Campbell" or the
"Company"), has mailed a detailed letter to shareholders regarding
Campbell’s record of wantonly spending shareholder money for poor
CEO performance that is not linked to positive performance. The
full text of the letter can be found here and below.
As a reminder, we encourage all shareholders to also review our
Case for Change to understand more about why the Independent Slate
will respect shareholder voices, end the Entrenched Board’s reign
of error, and set Campbell on a new and profitable path. We urge
all shareholders to VOTE THE WHITE CARD to elect the Independent
Slate.
***
November 7, 2018
Dear Fellow Campbell’s Shareholder,
When we read that CEO Denise Morrison –
who “resigned” in May – had taken over $60 million and run while
the stock price barely moved during her seven years in charge, we
knew shareholders had been taken for a ride.
We write today to ask you to VOTE THE WHITE CARD because the Incumbent Board
has carelessly given tens of millions of dollars to lousy
leaders. You deserve a Board who spends your money carefully
and wisely on CEOs who create shareholder value and promote
employee interests.
The Facts on Executive
Compensation:
The Incumbent Board boasts that it has created an executive
compensation program that is aligned to performance. One of a
board’s most important responsibilities is to have a program that
sets compensation fairly and thoughtfully, while carefully
stewarding shareholder capital. We were skeptical when we saw the
results of this Board’s “processes” with ex-CEO Morrison.
Considering how wastefully the Incumbent Board uses shareholder
money in areas like protecting their own secrets rather than being
transparent with shareholders,1 we decided we should investigate
how they pay their CEOs.
WE WERE RIGHT: THE COMPENSATION PROGRAM
SERVES EXECUTIVES, NOT SHAREHOLDERS OR EMPLOYEES. The
compensation program has failed. We believe it failed because the
Incumbent Board was either asleep at the wheel or made
affirmatively horrendous decisions to continue awarding
million-dollar payments to executives who were not driving
long-term value.
Overpaying the Last CEO
This failure is abundantly clear when reviewing the last CEO’s
excessive compensation. Ms. Morrison became CEO effective July 31,
2011, and the stock price on the previous day was $33.05. On the
day she “retired”, May 18, 2018, the closing stock price was a
little over $1 higher, while the S&P had more than doubled.
Yet, during her tenure, Campbell’s Board saw fit to lavish Ms.
Morrison with discretionary “performance” bonuses EVERY year.
Exactly what performance were they paying for?
In Ms. Morrison’s final two years at the company, long after it
should have become clear to any competent board that she had
committed a series of strategic, financial and operational blunders
that put your Company at risk, she pocketed almost $16 million in
total compensation. As if that were not enough, in connection with
her “retirement,” the Incumbent Board handed her another $2.3
million on the way out the door. The Board referred to this sum as
“104 weeks of severance pay,” which is odd considering that she
allegedly decided to “retire”. We have heard of company-sponsored
retirement parties with ice cream cakes, but never a
company-sponsored showering of over $2 million in shareholder money
to a retiree.
A CEO performing so poorly should have
been fired, not awarded $16 million over her last two years and
handed an extra $2 million just to leave. Instead, the Incumbent Board let her take the money
and run. Shareholders deserve
better.
Did the Board Learn From Its Mistakes?
No! When Ms. Morrison left, the Incumbent Board responded by
installing one of its own, Keith McLoughlin, former chief executive
of a vacuum cleaner company. While a board member stepping in as an
interim CEO should, in our view, receive an appropriate stipend, we
are shocked at the amount this Board has decided to bestow on an
insider to simply hold the wheel while the Company takes its time –
nearly six months and counting – to find a permanent leader after
finding itself left in the lurch when it failed in its essential
duty to plan for succession.
Once again, this Board is giving away your money without any
connection to performance. Mr. McLoughlin is being paid a base
salary of more than $1 million and received a shockingly high $3
million restricted stock grant, which vests in full when a
successor CEO is appointed (or, if earlier, 12 months from the date
of the grant).
What has Mr. McLoughlin done to show shareholders he deserves
this compensation package? It cannot be that the Incumbent Board
believed Mr. McLoughlin would instill a sense of confidence in the
market; the stock lost $1.5 billion in value on the day he was
appointed. The Incumbent Board’s failure to plan for Ms.
Morrison’s successor has resulted in a windfall for one of their
own. Shareholders deserve better.
The Facts on the Independent Slate’s
Plan:
Third Point is confident we can identify a world-class CEO who
will modernize products, improve employee morale, and help
shareholders. We have done this before, serving on the compensation
committees of other public companies and looking out for
shareholder interests first. Third Point is determined to bring a
culture of accountability, with greater board engagement and fair
pay for performance. No one minds paying fairly for a CEO who
benefits everyone but paying tens of millions of dollars to a CEO
who benefitted almost no one is just insulting.
The Independent Slate is running to replace the Incumbent Board
because we believe that with a flat stock price over 20 years,
Campbell has been focused on serving someone other than its public
shareholders and employees.
***
Your Vote Is Important, No Matter How Many or How Few Shares
You Own!
PLEASE REMEMBER TO CAN THE COMPANY’S CARD! If you
return a Campbell’s proxy card – even by simply indicating
“withhold” on the Company’s slate – you will revoke any vote you
had previously submitted for the Third Point nominees on the
WHITE proxy card.
IMPORTANT INFORMATION
On September 28, 2018, Third Point LLC filed a definitive proxy
statement and on October 1, 2018 filed Supplement No. 1 thereto and
on October 9, 2018 filed Supplement No. 2 thereto (collectively,
the “Definitive Proxy Statement”) with the U.S. Securities and
Exchange Commission (“SEC”) to solicit proxies from stockholders of
Campbell Soup Company (the “Company”) for use at the Company’s 2018
annual meeting of stockholders. THIRD POINT STRONGLY ADVISES ALL
STOCKHOLDERS OF THE COMPANY TO READ THE DEFINITIVE PROXY STATEMENT
BECAUSE IT CONTAINS IMPORTANT INFORMATION. THE DEFINITIVE PROXY
STATEMENT ALSO INCLUDES INFORMATION ABOUT THE IDENTITY OF THE
PARTICIPANTS IN THE THIRD POINT SOLICITATION AND A DESCRIPTION OF
THEIR DIRECT OR INDIRECT INTERESTS THEREIN. The Definitive
Proxy Statement is available at no charge on the SEC’s website at
http://www.sec.gov and is also available, without charge, on
request from Third Point LLC’s proxy solicitor, Okapi Partners LLC,
at (855) 208-8902 or via email at CPBinfo@okapipartners.com.
__________________________1 Third Point is currently pursuing a
case in a New Jersey court asking the Incumbent Board to provide
full and fair disclosures about a number of issues, including the
Board’s decision to lavish Ms. Morrison with a generous severance
package despite the Company’s abysmal performance during her
tenure. Rather than making these important disclosures to you, the
Company’s owners, it is spending hundreds of thousands of Company
dollars – and counting – to keep this information from you.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181107005587/en/
For Media:Third Point LLCElissa Doyle, 917-748-8533Chief
Marketing Officeredoyle@thirdpoint.com
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