Hedge fund D.E. Shaw has nominated three directors, including former Olin CEO Scott Sutton, to join the board of Air Products and Chemicals (APD, Financial) as part of an effort to steer the company back to its successful business strategies of the past. The move comes after accumulating approximately $1 billion in shares, making D.E. Shaw the second-largest activist investor in the company, alongside Mantle Ridge. Both funds aim to establish a clear succession plan for the current CEO Seifi Ghasemi, one of the oldest at S&P 500 companies.
D.E. Shaw expressed dissatisfaction with Air Products' handling of major transactions, particularly the launch of multi-billion dollar hydrogen projects without "offtake agreements," which typically provide investment security. This approach is seen as a potential reason for the company's performance lagging behind its historical average and peers. Despite competitors like Linde successfully employing low-risk projects with such agreements, Ghasemi remains steadfast in his strategy.
Additionally, both D.E. Shaw, Mantle Ridge, and numerous analysts believe that the compensation package for CEO Ghasemi is excessive and that there is insufficient planning for his succession. D.E. Shaw has questioned the board's effectiveness in addressing these governance concerns. While D.E. Shaw currently seeks to place three members on the board, Mantle Ridge's approach is more aggressive, pursuing a proxy fight for board control.
