Agriculture

The Canadian Press - ONLINE EDITION

Jana Partners identifies five Agrium directors it wants replaced

By: Lauren Krugel, The Canadian Press

Posted: 03/7/2013 3:04 PM | Comments: 0

CALGARY - Jana Partners LLC has identified the five directors it wants turfed from fertilizer giant Agrium Inc.'s board and replaced with its own in an increasingly nasty proxy contest.

The New York activist hedge is targeting Frank Proto, Susan Henry, Derek Pannell, Russell Horner and Mayo Schmidt.

Schmidt, the former Viterra CEO, was one of two directors Agrium (TSX:AGU) recently appointed to its 12-member board.

"We believe these five directors 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 managing partner Barry Rosenstein said in an open letter to shareholders on Thursday.

"Removing them will lift a burden off Agrium, without depriving it of necessary experience or company knowledge."

The letter accompanied a proxy circular filed in preparation for Agrium's April 9 annual general meeting in Calgary.

Proto, who was chairman until last year, has been on the board for two decades, making him the longest-serving member. Henry served on the board for 11 years, Pannell for five and Horner for eight.

Agrium chairman Victor Zaleschuk said in a statement that Jana's efforts are "certain to fail."

"It is unfortunate that Jana has chosen to personally attack directors who have impeccable track records as members of a board that continues to oversee significant value creation and which has been recognized for excellence in corporate governance," he said.

"I am proud of our directors and the role each of them has played in generating a 467 per cent shareholder return over the past eight years."

Agrium says its directors have a total of $23.7 million invested in the company, or an average of $2.6 million each, excluding new additions Schmidt and former John Deere & Co. executive David Everitt.

Jana's slate includes David Bullock, Stephen Clark and Mitchell Jacobson, who had leadership roles at UAP, Brenntag and MSC, respectively. The dissident slate also includes Rosenstein and former Liberal agriculture minister Lyle Vanclief.

The Jana proposal that has garnered the most attention has been to split off Agrium's retail segment, through which seeds and other products are sold to farmers, from its wholesale business.

Agrium says that notion will expose shareholders to too much risk and destroy value. Jana has criticized Agrium for focusing too much on the split idea while not addressing other proposals to cut costs, improve corporate governance and allocate capital more effectively.

In its own proxy circular earlier this week, Agrium likened Jana's slate to a "Trojan Horse" misleading shareholders into breaking up the company.

"Agrium has called our board slate a 'Trojan Horse' even though these nominees would be a minority of the board and could only accomplish change through building consensus," wrote Rosenstein.

"Why is Agrium's board so afraid of a minority of independent board members with relevant experience who can ask the tough questions?"

Agrium's proxy circular also took aim at a so-called "golden-leash" arrangement, whereby Jana would give its nominees special incentive payments to serve on Agrium's board. Agrium said that raises questions about the independence and commitment of Jana's candidates to Agrium's long-term performance.

"Agrium raises this smokescreen now out of desperation. Despite its misleading attacks, this formula is automatic, not discretionary, and based solely on stock performance, and thus fully aligns our nominees' interests with those of all shareholders," wrote Rosenstein.

"While Agrium falsely claims that we are focused on the short term, we would put our nominees' integrity and long-term value creation records against the records of any of Agrium's directors."

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required

In which story did you find the error? *
Please post the headline of the story or the title of the video with the error.
What was the error? *
Please post exactly what was wrong with the story.
What should we have written?
Please indicate your source for the correct information.
Who else should we interview to improve this story?
Please include any contact information you may have.
Can we contact you in the future for advice on stories about this topic?
Yes

No
First Name: *
Last Name: *
E–mail Address: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Phone: *
This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.
Colour:
Are you blue? If you can see this, leave it blank and get some CSS support.
Enter the words that you see: * This is to prevent our forms from being filled out automatically.
You have failed to correctly identify the words in the box above. Please try again.

More Agriculture

Undock

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.