Shareholder Battle At Phoenix | Company leaders, shareholders prepare for annual meeting showdown
The Hartford-based Phoenix Cos. and a major institutional stockholder, New York-based Oliver Press Partners LLC, are at odds over the future make-up of the board of directors, and the future direction of The Phoenix in general.
In dueling written statements, both sides have sought to make their case in advance of the company’s annual stockholders meeting in the spring.
In a letter to Phoenix principles, Oliver Press Partners, an investment management company that owns about 5 percent of The Phoenix Companies’ common stock, stated that it believes strategic and operational changes are needed to enhance value for stockholders and to protect the long term interests of policyholders.
Oliver said that the company’s stock price has consistently “underperformed its peers and is trading 40 percent lower today than its public offering price more than six years ago.” Over that same time period, the company’s principal life insurance subsidiary “has undergone no fewer than five ratings downgrades, compromising the security of the company’s existing policyholders and complicating the company’s efforts to generate new business on profitable terms,” Oliver said.
During the same period, “the board has endorsed management compensation with so many features that it required 45 pages to describe in last year’s proxy statement and includes, among many other provisions, an unfunded special pension account for senior executives of over $126 million, and a “golden parachute” termination plan for the CEO of $30 million,” he said.
Oliver said that his group’s board candidates “with independent perspective,” would help to focus the board “on the best interests of stockholders and policyholders.” The company also should consider the sale of the its non-insurance business and take steps to deal with the company’s cost structure “which appears to us to be out of line with comparable companies and puts Phoenix at a competitive disadvantage,” he said.
The two sides have chosen to conduct their duel in writing, and Phoenix President Dona Young issued a company statement in response to the Oliver Press Partners initiative, but did not directly address the group’s contentions.
“We have a strong and independent board of directors, and we are all confident in our business plan to deliver value for our shareholders,” Young said.
“Moreover, we remain committed to constructive dialogue with our shareholders,” she added, but stopped short of making an outright invitation to the challengers to a private meeting.
Over the past year the stock has traded between a low of $9.56 per share and a high of $16.88 per share.
WBJ Web Partners
Most Recent
Most Recent
0 Comments