Investment firm Mantle Ridge, which holds a $1.3bn share in Air Products, has proposed a replacement CEO for the industrial gas giant, in addition to four new directors. It has argued the board overhaul would help transform the company from “laggard to leader”.
The proposal comes after a turbulent period for Air Products, which has faced scrutiny from both Mantle Ridge and another investor, DE Shaw, with DE Shaw recently expressing its “continued disappointment” with Air Products to manage an effective CEO succession process.
Read more: Air Products faces renewed scrutiny from DE Shaw over CEO succession
Mantle Ridge has proposed Eduardo Menezes as a replacement CEO for Air Products, in addition to Andrew Evans, Paul Hilal, Tracy McKibben, and Dennis Reilley as independent director nominees.
Mantle Ridge has emphasised Menezes’ three decades of experience at Praxair, where he held senior regional roles and reported directly to the CEO, though Air Products has noted his lack of public company CEO experience.
In pitching Menezes, Mantle Ridge has also noted his fit to work with proposed director Reilley.
Mantle Ridge said Menezes and Reilley would be well-positioned to stop the talent exodus from Air Products, and to improve morale, engagement, returns on capital, growth, margins, and total shareholder return.
Mantle Ridge said Reilley and Menezes represented a “dream team.”
Despite its proposal, Mantle Ridge has said Seifi Ghasemi, Air Products’ current CEO, insists he will block all efforts to remove him.
It quoted Ghasemi as supposedly saying, “I will be chairman of this company so long as I am vertical… and I mean that.”
Air Products responds
Air Products has hit back at Mantle Ridge’s proposals, urging shareholders to vote for only Air Product’ nominees. It said that it has “thoroughly vetted Mantle Ridge’s director nominees, with assistance of a leading national search firm, and found them to be “inferior” to its current directors and its new nominees.
Read more: Air Products to refresh board following DE Shaw pressure
The company has criticised Mantle Ridge’s choice, stating that Menezes has never been a public company CEO, had responsibility for only one region at Linde, and was ultimately passed over for the role of CEO.
It added, “Mantle Ridge apparently has so little confidence in Menezes that it did not nominate him as a candidate for the board and evidently believes he would only succeed if he were paired with Reilley.”
Air Products further described Mantle Ridge’s letter as containing “outlandish claims” in reference to Reilley and Menezes being responsible for Linde’s total shareholder return between 2000 and 2024.
Air Products highlighted that Reilley left Linde in 2007 and Menezes in 2021. It said their combined contributions covered only a part of the business for part of that time.
Air Products added, “The fact remains that Air Products, under its current board and Ghasemi’s leadership, has created $44bn of shareholder value and an 11% adjusted EPS CAGR since 2014.”
