Air Products has rejected shareholder Mantle Ridge’s proposal to appoint a new CEO and Board of Directors after the investment firm suggested Eduardo Menezes as a replacement CEO.
Following Mantle Ridge’s proposal, the industrial gas giant was forced to issue a statement rejecting an overhaul in the CEO and Board of Directors. This statement comes just days after Air Products received criticism over its failure to manage an effective CEO succession process.
Read more:Air Products faces further pressure from D.E. Shaw over CEO succession
The $1.3bn shareholder called for a shake-up after saying the company has “dramatically underperformed over the past five years relative to its peers and its potential, a direct result of the poor stewardship” of Chairman and CEO, Seifi Ghasemi, and the board.
Mantle Ridge proposed to appoint Menezes as CEO and Dennis Reilley as Chairman. Air Products responded, stressing that this “should be troubling to all Air Products shareholders.” They also recommended Andrew Evans, Paul Hilal, Tracy McKibben as independent director nominees.
The statement read, “Mantle Ridge Chairman nominee Dennis Reilley has not held a management position in 18 years and would be coming into a company and industry that have undergone tremendous change in the last two decades, thereby rendering any ‘experience’ that he has as stale.
“Mantle Ridge’s choice for CEO is Eduardo Menezes, who has never been a public company CEO, only had responsibility for one region when he worked at Linde, and, as acknowledged by Mantle Ridge, was passed over for CEO at Linde.”
Mantle Ridge emphasised that Menezes and Reilley would be well-positioned to stop the talent exodus from Air Products and improve morale, engagement, growth, margins, total shareholder return and capital.
Despite the investment firm highlighting that the two would make a “dream team,” Air Products responded, stating, “Mantle Ridge apparently has so little confidence in Mr. Menezes that it did not nominate him as a candidate for the board and evidently believes he would only succeed if he were paired with Mr. Reilley.”
The online statement added, “Mantle Ridge has made outlandish claims that Reilley and Menezes are responsible for Linde’s total shareholder return between 2000 and 2024; however, Mr. Reilley left Linde in 2007, and Mr. Menezes left Linde in 2021, and only ran part of the business for part of that time.”
In the letter, Air Products also underlined its $44bn generating in shareholder value and an 11% annual EPS growth since 2014.
The oil and gas major stated that if shareholders back the new independent director candidates, Bhavesh Patel and Alfred Stern, at the 2025 Annual Meeting, the refreshed Board “will oversee a rigorous CEO succession process already underway and has committed to announce a new President and timeline for the CEO transition by March 31, 2025.”
Air Products defends clean hydrogen vision amid investor push for overhaul
Air Products is urging its shareholders to vote for the company’s own director nominees as an activist investor pushes for a major overhaul of its strategy, which includes an intense push on clean hydrogen.
The industrial gas major issued a statement to stakeholders ahead of its 2025 annual meeting in a bid to bolster support for its strategy on growing its core gas business while accelerating its clean hydrogen drive.
“We believe this strategy will maximise value for shareholders as the global economy continues to adopt lower carbon sources of energy,” the statement said after the firm had faced challenges on its CAPEX on clean energy projects.
Mantle Ridge, an activist investor, led by Paul Hilal, had reportedly signalled plans to work with two former Linde executives to reshape Air Product’s board, following a public letter from D.E. Shaw called for an overhaul of the board, limits on CAPEX and a clear CEO succession plan.
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