NEW YORK - The D.E. Shaw group, a global investment firm with over $65 billion in investment capital, has publicly expressed its dissatisfaction with the Board of Directors of Air Products and Chemicals, Inc. (NYSE:APD) regarding the company’s CEO succession planning. The criticism comes as APD, currently valued at $63 billion, trades at $283.29 per share, having delivered a 7.37% return over the past year. According to InvestingPro analysis, the company maintains a "GOOD" overall financial health score, suggesting strong fundamentals despite governance concerns. In an open letter released today, D.E. Shaw criticized the board for its handling of the process and indicated its intention to support changes at the upcoming 2025 Annual Meeting.
According to D.E. Shaw, the current CEO of Air Products, Seifi Ghasemi, has been allowed to lead the company’s succession planning, a move they consider a deviation from good governance practices. The firm pointed out that despite Mr. Ghasemi being one of the oldest CEOs in the S&P 500 without a named successor, there has been no clear timeline provided for his retirement or the appointment of a new CEO.
The letter outlines concerns that the board’s approach has contributed to a multi-year pattern of share price underperformance when compared to industry benchmarks. D.E. Shaw highlighted that Ghasemi’s unchallenged authority has led to a high-risk capital allocation strategy, which they believe is responsible for the destruction of shareholder value.
The firm also noted that the board has failed to communicate effectively with shareholders about the CEO succession process. They stated that the company’s investor presentation dedicated only one slide to the topic, and no detailed plan or timeline has been disclosed.
D.E. Shaw’s letter included references to the views of large Air Products shareholders such as Vanguard, State Street (NYSE:STT), and BlackRock (NYSE:BLK), emphasizing the importance of a board’s role in CEO succession planning. The letter concluded with a call for substantial changes in the board’s composition, including Mr. Ghasemi’s retirement from the board, to ensure proper oversight and management of the succession process.
The letter from D.E. Shaw is based on their own analyses and opinions and is intended to inform Air Products shareholders and the broader market of their position. The investment firm manages funds that currently hold an economic interest in Air Products and Chemicals, Inc. With analysts maintaining a consensus "Buy" recommendation and a high price target of $395, investors seeking detailed analysis can find additional insights through InvestingPro, which offers 6 key ProTips about APD’s valuation and growth prospects.
In other recent news, Air Products and Chemicals, Inc. has been the subject of significant corporate developments. The company recently 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 terms of governance, investment firm Mantle Ridge LP, which holds a significant stake in Air Products, has proposed a restructuring of the board, nominating four new directors. This move is aimed at addressing what Mantle Ridge describes as persistent underperformance and governance issues. In response, Air Products’ board has recommended shareholders vote for its slate of director nominees.
Additionally, 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.
Air Products continues to focus on the burgeoning 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, signaling 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.