Argo chairman and four directors to retire
A month after losing its chief executive officer, Argo Group International Holdings Ltd has announced its chairman Gary Woods is to retire in March, along with four other directors.
It has also moved to head-off a proposed special shareholders’ meeting aimed at removing and replacing up to five directors — something it said is unnecessary given its “board refreshment” announcement.
The Bermudian-based company is under investigation by the US Securities and Exchange Commission regarding disclosure of certain compensation matters.
In addition, Argo’s independent directors are conducting a review of governance and compensation matters.
Argo’s credit ratings were last month placed under review with negative implications by AM Best. The agency said that when it affirmed Argo’s ratings in October it had been unaware of the SEC subpoena that had been issued to Argo “some time before”.
Mark Watson retired as CEO last month, and was set to place $2.2 million of his company shares into an escrow account, to be used to reimburse Argo if an investigation finds that certain personal expenses of his were paid for by the company. He continues to act as an adviser to the company and board member until the end of the year.
Kevin Rehnberg has been appointed interim CEO.
Earlier this year, Argo was involved in a bruising proxy battle with activist shareholder Voce Capital Management LLC, which has been calling for changes to the board. The San Francisco hedge fund is beneficial owner of about 5.8 per cent of the shares of Argo. It attacked what it called a “spendthrift culture” and “inappropriate corporate expenses” at Argo.
The company responded by saying the claims were “poorly researched” and had “little regard for the truth”.
Last Friday Voce, along with Voce Catalyst Partners LP, Voce Capital LLC, Voce Catalyst Partners New York LLC and American J. Daniel Plants, made a filing with the SEC aimed at securing a special general meeting of Argo shareholders, with a view to seeking the removal and replacement of up to five members of the Argo board.
Argo has now filed a consent revocation statement and is urging shareholders to sign it. In a statement, it said: “The board has concluded that such a special general meeting is unnecessary given its ongoing corporate governance review and board refreshment process which has resulted in the aforementioned changes.
“With the retirement of five members of the board and an accelerated timeline for the 2020 AGM, the board does not believe it is constructive to call a special general meeting that would be convened a few weeks before the AGM and entail unnecessary costs and distraction.”
The four directors who, along with Mr Woods, will retire at the annual meeting, are F. Sedgwick Browne, risk and capital committee chairman; Hector De Leon, member of the audit and human resources committees; Mural Josephson, audit committee chairman; and John Power, human resources committee chairman.
The AGM is usually held in May, but is being brought forward to March.
Argo said the changes were being made as part of a proactive refreshment process announced in August. It said it has engaged a leading national executive search firm to identify highly qualified director candidates, and welcomes input from shareholders in the director search process.
In its statement, Argo said: “The board intends to present proposals at the 2020 AGM to declassify the board and reduce the maximum size of the board from 13 to 11 director seats. The board will also present to shareholders its revised executive compensation programme.”
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