Air Products rejects ISS recommendation, supports own board nominees

Published 13/01/2025, 21:54
Air Products rejects ISS recommendation, supports own board nominees

LEHIGH VALLEY, Pa. - Air Products (NYSE:APD), a $66.7 billion industrial gases company known for its stable performance with a beta of 0.85 according to InvestingPro, has publicly disagreed with Institutional Shareholder Services' (ISS) recent recommendation and is urging its shareholders to vote for its own slate of nominees using the WHITE proxy card for the upcoming Annual Meeting on January 23, 2025. Shareholders of record as of November 27, 2024, are entitled to vote.

The company warns that adopting ISS' recommendation could negatively impact the company and its shareholders. Air Products, which maintains a GOOD financial health score and has sustained dividend payments for 55 consecutive years, emphasizes the importance of stability, growth, and value creation, which it believes its nominees can provide. In contrast, the company criticizes Mantle Ridge's nominees for lacking a go-forward plan and having outdated or inadequate experience.

Air Products is focused on executing a two-pillar growth strategy and a CEO transition by March 31. The company highlights its ongoing projects, such as the NEOM project in Saudi Arabia and the Darrow project in Louisiana, as part of its clean hydrogen strategy. The board of directors, which includes two new nominees with substantial experience, is positioned to continue its growth strategy and manage the CEO transition.

In contrast, the company claims Mantle Ridge's nominees offer no plan and could potentially disrupt the company's direction and performance. Mantle Ridge's approach is portrayed as prioritizing short-term gains over long-term innovation and investment.

The board has unanimously recommended voting for Air Products' nine nominees and proposals on the WHITE proxy card. Shareholders are advised to discard any blue proxy cards received from Mantle Ridge.

The company's statement, based on a press release, highlights the board's collective experience and the strategic importance of the nominees for the future of the company. Air Products, with fiscal 2024 sales of $12.1 billion and a current dividend yield of 2.42%, operates in approximately 50 countries and is a leading global supplier of hydrogen, aiming to support the transition to low- and zero-carbon energy sources. For detailed analysis and additional insights about Air Products' valuation and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Air Products and Chemicals (NYSE:APD), Inc. has been the center of significant corporate developments. The company has reported a 13% year-over-year increase in adjusted earnings per share for Q4 2024, aligning with their guidance. For fiscal year 2025, Air Products anticipates an EPS growth of 6% to 9%, despite selling its LNG business to Honeywell (NASDAQ:HON). In addition, analysts at Mizuho (NYSE:MFG) and BMO Capital have maintained their Outperform ratings on Air Products, adjusting their price targets to $385 and $350 respectively, following these strong Q4 results and fiscal year guidance.

In governance news, investment firms D.E. Shaw and Mantle Ridge LP have expressed concerns over the company's governance, specifically criticizing the handling of CEO succession planning. Both firms have proposed changes in the board's composition at the upcoming 2025 Annual Meeting. In response, Air Products' board has recommended shareholders vote for its slate of director nominees.

Furthermore, Air Products continues to focus on the emerging clean hydrogen market, with multiple projects in progress, including a 15-year contract to provide TotalEnergies (EPA:TTEF) with green hydrogen starting in 2030. The company's construction-in-progress currently stands at $11 billion, indicating a significant increase in ongoing projects. These are recent developments in the company's operations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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