Proxy firms support Argo’s director nominees
Two independent proxy firms have thrown their support behind the seven director nominees put forward by Bermudian-based Argo Group for election at the company’s annual general meeting next week.
Additionally, Argo said Voce Capital Management LLC, the owner of approximately 9.5 per cent of the company’s common shares, has informed the company that it has voted all of its shares on the proxy card in support of the seven Argo nominees.
Argo is locked in a battle with activist investors Capital Returns Management LLC, which contends that two of those directors — Bernard Bailey and Al-Noor Ramji — should be replaced by its nominees, Ronald Bobman and David Michelson.
Argo said the proxy advisory firms, Institutional Shareholder Services and Glass Lewis & Co, have recommended that shareholders vote for Argo’s director nominees at the AGM on December 15.
In making its recommendations, Argo said, ISS stated in its December 2 report:
• “The dissident has not made a compelling case for change. The highest priority for Argo is the ongoing strategic review. There is no reason to believe that the process is not being conducted to advance the best interests of shareholders, and there is no indication that a key competency or perspective is absent from the strategic review committee.”
• “The addition of Dan Plants in early August only bolstered the board's credibility, particularly because he was appointed to chair the strategic review committee.”
• “Argo appears to have emerged from the tumult of 2019 with a more focused strategy. The company began closing and selling international and non-core units, and now draws over 95 per cent of its revenue from the United States. This transition may have contributed to improved operations, as the revenue CAGR since the end of 2019 is almost double the claims and loss growth rate, even when the impact of the increase in loss reserves is taken into account.”
In making its recommendations, Argo said, Glass Lewis stated in its December 2 report:
• “Overall, we recognise that steps taken by the incumbent board and management have significantly transformed Argo into a focused US specialty commercial insurance business and the resulting company appears stronger, more efficient and better positioned to generate value for shareholders than the legacy structure, in our view.”
• “Shareholders should note that Capital Returns has not offered alternative suggestions to improve the business beyond pursuing a sale of the whole company. Given that the board is already considering a sale and has solicited a large range of potential counterparties as part of the strategic review, we do not believe the dissident nominees would be clearly additive to the strategic review process or likely to improve the outcome for all shareholders, if appointed to the board.”
• “Furthermore, given the level of operational as well as board and management change that has already taken place at Argo over the last several years, we do not believe a further shake-up of the board would be a favourable development at this time.”
Argo said: “We are pleased that ISS and Glass Lewis support the election of all seven of Argo’s director nominees. Both of these recommendations further validate our belief that Argo’s seven highly qualified nominees with relevant expertise and proven track records continue to move with speed to best position the company.”