Billionaire investor Daniel Loeb told retailer Bath & Body Works on Wednesday that his hedge fund Third Point plans to launch a board challenge and said the company's addition of new directors does not address his concerns about governance, capital allocation and executive pay.
The move did not appease Loeb and he accused the group of "operating in triage mode" instead of following best corporate governance practices. He said that the board left him no choice but to mount a proxy fight because his requests to add a shareholder representative to the board were ignored.
"Our discussions have stalled and our concerns about the way this board operates have intensified," the letter said. He declined to say how many director candidates he would nominate or to identify them but said that one of his potential candidates had been rebuffed by the company. Bath & Body Works in the last two weeks added two new members - a veteran chief financial officer with expertise in capital allocation and an expert in consumer products - to the board.Loeb also took aim at Sarah Nash, the company's current board chair who had briefly assumed the role of interim chief executive last year.
She was paid $18 million on top of the $700,000 she was receiving to be board chair, Loeb wrote, calling the pay package "outsized," saying it signals a massive governance failure. Loeb said the company bungled its succession planning and that Nash was "ill-suited" for interim CEO role.Bath & Body Works is valued at roughly $10 billion.
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