Activist investor Third Point LLC on Wednesday laid out a plan to appoint candidates — together with a shareholder consultant — to the board of Bath & Body Works Inc., saying shareholders “urgently need representation” on grounds that government pay was too excessive and financials have been too weak.
The Wall Street Journal reported the news earlier within the day. The funding agency introduced the plans after it boosted its stake within the firm throughout the fourth quarter. Third Point has a greater than 6% stake in Bath & Body Works
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The firm didn’t instantly reply to a request for remark. Shares of Bath & Body Works rose 2.7% on Wednesday.
In a letter to the board of the corporate — which sells cleaning soap, air fresheners, body-care objects and different wellness merchandise — Third Point Chief Executive Daniel Loeb stated the decision for larger shareholder illustration got here after discussions on tips on how to enhance the corporate “stalled” and indicators of resistance to a shareholder consultant grew.
He additionally stated Bath & Body Works didn’t acknowledge Third Point’s function in suggesting the appointment of Lucy Brady — who’s president of grocery and snacks at Conagra Brands Inc.
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— as an unbiased director. And he stated board chair Sarah Nash gave “unconvincing explanations” for rejecting a second candidate, one other shareholder, who was put ahead by Third Point.
Loeb additionally criticized the roughly $18 million that Nash obtained for taking over a brand new function as government chair and interim chief government final 12 months, calling the interim CEO stint “part-time” work.
“That payment came on top of the $700,000 she was already receiving annually to serve as Board Chair,” Loeb stated. “Ms. Nash’s exorbitant compensation is even more remarkable when compared to her counterpart at the Company’s closest and much larger competitor, Ulta Beauty, which paid its Chief Executive Officer approximately $8.9 million in 2022.
“Ms. Nash’s outsized pay package is a red flag for shareholders and signals a massive governance failure,” Loeb continued.
Gina Boswell is the corporate’s present chief government.
Bath & Body Works’ inventory has fallen as Wall Street grows extra involved concerning the influence of inflation on issues clients wish to purchase — just like the self-care merchandise bought by the chain — and the issues they should purchase. However, the retail chain in November boosted its full-year revenue outlook.
Loeb additionally criticized what he stated was Nash’s inexperience in retail and stated her function as chief government at one other firm raised questions on her dedication to Bath & Body Works. The firm’s separation from Victoria’s Secret in 2021, adopted by a CEO departure in 2022, led to stumbles in efficiency and in managing traders’ expectations, he added, resulting in “sloppy execution” on a share-buyback plan.
“[Bath & Body Works] bought back $1.3 billion of stock at an average price of nearly $50 before multiple cuts in earnings guidance sent the stock as low as $25,” Loeb stated.
Bath & Body Works shares are down 18.2% over the previous 12 months. By comparability, the S&P 500
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is down 7.4% over that interval.
Source web site: www.marketwatch.com