Proxy adviser Glass Lewis has recommended that shareholders of WEX support two of the three director nominees put forward by activist investor Impactive Capital, signalling support for limited board change while stopping short of endorsing a full overhaul, according to a report by Reuters.
Glass Lewis has advised WEX investors to elect Impactive Capital co-founder Lauren Taylor Wolfe and payments industry executive Kurt Adams to the board at the upcoming annual meeting. At the same time, the firm recommended withholding support from CEO Melissa Smith and current director Stephen Smith.
The recommendation comes ahead of a shareholder vote scheduled for 5 May, unless the company and the activist reach a last-minute settlement. The contest has emerged as one of the more contentious proxy battles of the year.
In its analysis, Glass Lewis acknowledged concerns raised by Impactive regarding WEX’s performance and governance. The adviser pointed to a period of underperformance and noted that prior shareholder voting results indicate growing unease among investors toward the board, including leadership.
However, it also recognised steps already taken by the company, such as board refreshment initiatives, suggesting these actions demonstrate responsiveness to shareholder concerns.
Overall, Glass Lewis concluded that some degree of board change is justified, but said the case for a more sweeping restructuring is not sufficiently compelling at this stage.
WEX pushed back on the recommendation, arguing that it overlooks key financial improvements, including stronger returns on invested capital, margin expansion, accelerating growth, and solid shareholder returns over the past year.
Impactive Capital, meanwhile, welcomed the report, reiterating its view that the company’s performance and governance shortcomings require new independent voices in the boardroom. The activist has criticised CEO Melissa Smith’s compensation and oversight but has clarified it is not seeking her removal as chief executive.
Efforts to reach a compromise have so far been unsuccessful. Impactive has proposed adding two new directors, including one of its own representatives, and has also raised the possibility of separating the chair and CEO roles. According to Glass Lewis, WEX has resisted appointing a representative from the activist firm.
A separate recommendation from Institutional Shareholder Services is still pending.
