Proxy advisory firm Glass Lewis has endorsed the election of all four board candidates proposed by activist investor Mantle Ridge for Air Products and Chemicals, marking a key moment in the year’s first major board battle, according to a report by Reuters.
Mantle Ridge contends that the industrial gases company needs a clear succession plan for its 80-something CEO, Seifi Ghasemi, who has led the company for a decade. The firm also advocates for changes in capital allocation and a reduction in risky projects.
Mantle Ridge’s slate of candidates, which includes hedge fund founder Paul Hilal, aims to bring more order to the board. A vote will take place on January 23 unless a compromise is reached beforehand.
Glass Lewis praised Mantle Ridge’s “highly credible” slate, suggesting the nominees are well-suited to address the company’s challenges. The firm also criticised Air Products’ past performance, highlighting high-cost, low-visibility strategies that strayed from the company’s core risk profile.
In response, Air Products strongly disagreed with Glass Lewis’ assessment, calling the report “sloppily-compiled” and arguing that Mantle Ridge’s nominees would lead to destabilising changes and remove valuable expertise from the board. The company warned that following Glass Lewis’ recommendation could harm shareholder value.
This marks the second clash between Mantle Ridge’s Hilal and Air Products. A decade ago, Hilal’s former firm, Pershing Square Capital Management, helped bring Ghasemi to the board before elevating him to CEO.
Hilal has also reportedly partnered with former top executives from Air Products’ competitor Linde, including Eduardo Menezes, whom he has identified as a potential successor to Ghasemi. However, Menezes is not one of the proposed board candidates.
Air Products announced last year it would replace two retiring directors, with Bhavesh “Bob” Patel, former CEO of W.R. Grace and LyondellBasell, joining the board. Patel has also been mentioned as a potential future CEO.
Glass Lewis is the first major proxy advisory firm to issue a recommendation, with investors now awaiting a report from Institutional Shareholder Services, its larger competitor.
