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Activist investor Third Point LLC confirmed that it is launching a proxy fight against Bath & Body Works (NYSE:BBWI). The Wall Street Journal was the first to report on Third Point’s intentions.
The hedge fund, founded by billionaire Dan Loeb, believes the company offers excessive executive pay. It highlighted that BBWI paid interim chief executive Sarah Nash roughly $18 million for less than a year’s worth of work.
Bath & Body Works appointed Gina Boswell as the new chief executive officer in December. She previously held leadership roles at companies such as Unilever (LON:ULVR), Alberto Culver, and Estee Lauder (NYSE:EL).
The activist investor, which disclosed a more than 6% stake in BBWI last December, plans to nominate candidates to the company’s board. It decided to launch a proxy fight after initial conversations with the company stalled.
“We raised concerns about the Company’s corporate governance and decision-making processes. We have identified numerous issues pertaining to the Board of Directors’ oversight of executive compensation, succession planning, capital allocation, investor communication, and strategy for enduring value creation,” Third Point said in its letter.
BBWI is due to have its annual meeting in the coming months while the time frame for nominating candidates to the board expires on March 13. According to the WSJ report, Third Point still hasn’t decided which directors it will aim to replace.
“The Bath & Body Works Board and leadership team are united in their focus on driving enhanced shareholder value creation, and we regularly consider the input and recommendations of all our shareholders. However, the Board strongly disagrees with the views expressed in Third Point’s letter,” the company said in a statement.
The proxy fight comes as the company prepares to release its fourth-quarter results after the market close today. The Street is looking for earnings per share of $1.60 on revenue of $2.8 billion.
Speaking about recent changes at BBWI,Barclays analysts said:
“With the introduction of new CEO Gina Boswell, we see near-term support for shares.”
BBWI stock trades 1.7% lower in premarket Thursday.
