Calls Out Arconic’s Blatant and Relentless Efforts to Disenfranchise Shareholders
Urges the Election of All Four Highly Qualified Shareholder Nominees to Arconic’s Board
The full text of the letter follows:
Dear Fellow Shareholders of
Three times in the past six weeks, we have received the unwelcome news that Arconic’s Board and management have tampered with the upcoming shareholder vote in an effort to entrench themselves and in blatant disregard of their fundamental duties to shareholders:
March 13th, it was revealed that the Company traded valuable legal claims for a two-year voting agreement designed to entrench the Board and management.
April 12th, the Company threatened shareholders with a $500 million“poison put” liability designed to raise the specter of significant financial harm should the nominees put forward by Elliott Management(the “Shareholder Nominees”) be elected.
- Yesterday, the Board postponed the Company’s Annual Meeting of Shareholders to a yet-to-be-determined date.
We can only assume that this postponement represents an attempt by the Company to buy itself additional time to solicit votes, because the departure of former CEO
We suppose we are gratified that the Board has grudgingly acknowledged that all of the Shareholder Nominees are highly qualified, independent and would make worthwhile additions to the Board. However, it is obvious that the Board’s sudden change of heart regarding the same nominees it has spent the past three months vigorously opposing is just another ploy to protect its own prerogatives. Lamentably, under the stewardship of Interim Chair
To justify this behavior, the Company has made two arguments:
Elliott is seeking “undue influence” over the Company: This argument is profoundly flawed on its face. Elliott hasn’t nominated any of its employees or affiliates, and the Shareholder Nominees will have no ties with Elliott. Instead, up for election are three former aerospace operating executives with a combined 80 years of industry experience (including at the Company and its closest competitor,
Unfortunately, an expression of the will of a majority of Arconic’s voting shareholders is exactly what this Board seems intensely focused on avoiding.
We believe the reason is obvious: Every single
This Board apparently believes that real change is unwarranted. They have expressed that view with remarkable consistency since this contest began. They stuck with that view even after Elliott blew the whistle on Dr. Kleinfeld’s unethical attempt to trade corporate assets for votes. Indeed, in becoming Dr. Kleinfeld’s advocate rather than the corporation’s steward, the Board created an “anything goes” culture amidst which
Unbelievably, the Board continued to insist that no real change is necessary even in the wake of Dr. Kleinfeld’s disgraceful exit from the stage. The Board took pains in announcing his departure to dismiss “Elliott’s criticisms of the Company’s strategy, leadership or performance,” and it made sure to “reaffirm the strategy developed under [Dr. Kleinfeld’s] leadership.”
Even the Board’s latest letter offers insufficient change, and offers it only as a distraction as it seeks to buy time and postpone the verdict of shareholders. At the same time, its intense desire to maintain the status quo appears to have warped its perception of reality. If any further proof is needed, look no further than the letter it released yesterday, in which it drew a false equivalence between Elliott’s substantive analytical criticism of Dr. Kleinfeld’s public record and Dr. Kleinfeld’s veiled threats to extort a senior officer at Elliott based on completely false insinuations.
Proxy contests are expensive, time-consuming and exhausting. They are a last resort and never a preferred option. But sometimes they are necessary. The events of the past two months – the belated revelation of a secret vote-buying agreement, the voluntary triggering of an old-fashioned “poison put,” the obstinate defense of
At this point, given where things stand, we have determined that the only realistic way to produce the kind of change
The Board clearly thinks little of the Company’s shareholders or their votes, but we value your vote highly.
Please join us in voting the BLUE card today.
1 A summary of public support for the Shareholder Nominees and the need for change can be found at http://newarconic.com/reactions