Weekly Activism & Executive Moves Review (Mar 2- Mar 8)

• Add Adam J. Katz, the Chief Investment Officer of Irenic Capital Management, to the board
• Board size limited to 11 maximum
• Irenic must hold a net long position of 3% minimum
• Effective March 5, 2024, board engaged Larry Lawson, former CEO of Spirit AeroSystems Holdings, Inc., to serve as a special advisor to the Board and the Company’s senior management team.
• Chairman Thomas O. Barnes and Mylle Mangum resign as of shareholder meeting

• Board size temporarily goes to 14 from 11
• Richard N. Peretz and Wendy M. Weinstein appointed to the board. Third new independent director to be named.
• Mr. Peretz appointed to the Compensation and Human Capital Committee
• Ms. Weinstein to the Nominating and Corporate Governance Committee
• At 2024 AGM, board to reduce to 11 with 3 incumbent directors with tenures over 5 years resigning
• At 2025 AGM, board to reduce to 9 with 2 incumbent directors with tenures over 5 years resigning
• Creating an Operational and Financial Performance Task Force — to include Mr. Peretz and Ms. Weinstein and utilize nationally recognized consulting firm

• Board adds: Theodore R. Bigman, Founder and Chief Investment Officer of Bigman Holdings and former Head of Global Listed Real Assets Investing at Morgan Stanley Investment Management
• Board adds: Joe V. Rodriguez, Jr., President of Burnt Mountain Investments LLC and former Chief Investment Officer of Invesco Real Estate
• Bigman added to the Investment Committee
• Rodriguez added to the Nominating, Governance and Corporate Responsibility Committee
• Coop agreement effective until day after 2025 annual meeting

• Added Craig Macnab to the board

• Appointing  David Heath, Charles Liu and Michael Kvitko to the board at annual meeting (observers until then).
• 3 existing directors to retire at meeting: Brian Carney, Laurens Goff and Christina Francis

• BJs to create a “Shareholder Value Initiatives” committee
• Appoints C. Bradford Richmond to the board — previously CFO of Darden (DRI)

• Ronald Mitchell to continue on the board until the 2025 shareholder meeting

1. Reduce the current cost structure by $50 million by the end of the second quarter of 2024 with a focus on G&A, Labor and Purchasing
2. Execute a $100 million stock buyback.
3. Reduce the Board size to seven members, all of whom are focused on shareholder value.
4. Appoint PW Partners’ representatives to the Board.

On February 28th, investor formally nominated Jeffery Crivello and Patrick Walsh to the board.

Investor also putting an additional shareholder proposal to repeal each provision of, or amendment to, the Bylaws adopted by the Board without the approval of the shareholders of the Issuer subsequent to August 14, 2020, which is the date of the most recent publicly available amendment to the Bylaws.

• At the invitation of the LPSN, on February 28, 2024, Vector and the LSPN entered into a letter agreement (the “Confidentiality Agreement”), for the purpose of facilitating the discussion of the company and its performance
• The agreement expired on March 4th after LSPN issued their 10-K
• LSPN and Vector are discussing another agreement, that will likely be a more holistic “cooperation” agreement versus a simple confidentiality agreement

• Trian owns ~$3 billion in DIS shares.
• Trian and Nelson Peltz are campaigning for 2 board seats, one for Mr. Peltz and one for former CFO of Disney James A. Rasulo.
• Trian and Peltz also have the backing of Ike Perlmutter, a former Disney employee that is one of the largest independent shareholders. Perlmutter had previously agitated for Peltz to be given a board seat in 2022.
• Trian launched an initial proxy battle in 2022 where he advocated for cutting costs, fixing the streaming business, and get executive succession right. He ended that fight early after Disney announced a restructuring that included over $5.5 billions in cuts.
• Trian has a site dedicated to the campaign called Restore The Magic

Activist / Blackwell’s Summary

• Blackwell’s also believes that Disney could unlock more value.
• Blackwell’s is against Trian / Peltz receiving any board membership.
• Blackwell’s only own’s approximately $15 million of DIS shares.
• Blackwell’s released a video making their case against Trian here and their own site, The Future of Disney.

Other Activity

• On February 29th, nine of Walt Disney’s grandchildren — including Abigail Disney and Roy Disney — put their weight behind Bob Iger and the current board. They forcefully rejected the idea that Trian and Nelson Peltz joining the board would be a positive for the company.

• Norfolk Southern (NSC) has tried to fight back by “proactively” looking to refresh the board with two new directors: Richard Anderson, the former chief executive of Amtrak and Delta Airlines and former U.S. sentaor Mary Kathryn “Heidi” Heitkamp.
• Ancora sent a scathing open letter to Chairwoman Amy Miles regarding CEO Shaw’s executive compensation increase.
• WSJ has a good summary of the fight here.

Activist / Ancora Summary

• Nominating 8 new directors to the board.
• Believes that CEO Alan Shaw must go.
• Wants to replace top executives and put Jim Barber Jr, former UPS COO, as CEO and Jamie Boychuck as COO.

• Choice Hotels made an unsolicited exchange offer to acquire all outstanding shares of Wyndham.
• Wyndham’s Board of Directors, after a comprehensive review, unanimously determined that the offer is not in the best interests of Wyndham and its shareholders.
• Choice disputes Wyndham’s antitrust claims and asserts that the offer is beneficial. They issued an investor presentation and infographic challenging Wyndham’s assertions.
• Choice, after failed negotiations, launched a hostile takeover bid for Wyndham.
• They also plan to challenge for seats on Wyndham’s Board of Directors at the next shareholder meeting.

• The Strategic Organizing Center (SOC), a coalition of unions, believes that Starbucks has implemented a flawed human capital management strategy in response to a prolonged union movement.
• Union Dispute: Baristas at almost 400 Starbucks-owned cafes have voted for organizing since late 2021, with the first successful unionization taking place in Buffalo. The unionization movement, primarily led by younger workers and intensified under former CEO Howard Schultz’s leadership, saw Schultz return as the union fight escalated before his departure last year, replaced by Laxman Narasimhan.
• The SOC seeks to replace three current Starbucks board members with its nominees.
• Starbucks defends its board, highlighting their expertise in driving current operations and future success. The company emphasizes its commitment to employees, citing investments in wage increases, training, and equipment. However, contract negotiations remain unresolved despite Starbucks’ expressed intent to resume talks in January.
• he Institutional Shareholder Services (ISS) has recommended shareholders vote in favor of all Starbucks board nominees

• Ancora has buitl a $250 million position in Elanco
• They believe Elanco’s “biggest barriers to success are the Company’s insular Board and unaccountable CEO.”
• Elanco’s board is staggered (a governance red flag at all times)
• Ancora argues that over any longer-term horizon, management has delivered negative shareholder return and, only when the market realized Ancora had become material investors and may create change, has the stock price begun to rise.
• Ancora is pushing for 4 board seats for: Kathy Turner, Craig Wallace, James Chadwick, and Andrew Clarke.

• 180 Degree Capital has nominated Matthew McLaughlin to the SCOR’s board