Argo’s Vague Commitment to Reduce Board Size By 2022 is a Transparent
Entrenchment Maneuver in Reaction to Voce’s Corporate Governance Campaign
Company’s Actions Would Deprive Shareholders of the Opportunity to
Vote for New Directors – while Voce has put Forward Five
Highly-Qualified Nominees for Election NOW at 2019 Meeting
SAN FRANCISCO–(BUSINESS WIRE)–Voce Capital Management LLC (“Voce”), the beneficial owner of
approximately 5.6% of the shares of Argo Group International Holdings,
Ltd. (NYSE: ARGO) (“Argo” or the “Company”), today issued the following
statement in response to Argo’s Definitive Additional Materials filing
regarding planned changes to the Company’s Board:
“Yesterday, shortly before issuing a press release about the election of
Directors at its upcoming 2019 Annual Meeting of Shareholders, Argo also
quietly filed an addition to its proxy
materials floating the idea of potential future changes to its Board
of Directors (the “Board”), whose composition Voce has strongly
criticized. In particular, Voce continues to believe that Argo’s
controlling ‘Big 5’ Directors – with an average tenure of 18 years, and
long-standing ties to CEO Mark E. Watson III – must be replaced with
truly independent Directors selected by, and aligned with, all
shareholders.
In response to our criticisms, Argo’s whispered assurances that it has ‘expectations
that the existing size of the Board (13) will decrease back to 10
members over the next three years’ i.e., 2022, in no way
addresses our concerns nor provides the changes required to confront
Argo’s immediate needs. We believe this last-minute legerdemain, devoid
of any details or even a firm commitment to follow through on it, is
designed to mollify shareholders disillusioned by Argo’s poor corporate
governance and over-tenured board rather than to confront the changes
represented by the proposals and slate Voce has put forward this year.
In fact, the Board’s subsequent May 14, 2019 letter to shareholders,
issued the very next day, made no mention whatsoever of this
concept – further illustrating its lack of credibility.
Here’s what shareholders still don’t know:
-
Was the Board’s quiet filing required because the Big 5 cut a deal to
try to extend its grip on power? -
The Board talks about a reduction to 10 members, “as a function of
retirement of some Directors and ongoing recruitment of new
Directors.” Who will be added and through what process? -
Which Directors will retire over the next three years, when and in
what order? - Who will replace them?
The absurdity of this deception is magnified by Argo’s staggered Board,
which grants Directors three-year terms. If, as Argo now seems to
begrudgingly acknowledge, some of its Directors are long in the tooth,
why grant them a three-year swan song? Does its ‘refreshment process’
include Francis Sedgwick Browne, aged 76, who is standing for reelection
in 2019 at the upcoming meeting? We can’t recall a Director ever
maintaining his seat by suggesting, before he’s even been
reelected, that he might retire sometime in the future. How about just
doing so now instead? Indeed, based on the potential timeline Argo has
laid out, the Big 5 Directors targeted for replacement by Voce could all
still be on the Board until May 2022 – three years from the upcoming
2019 Annual Meeting! At that time, the average tenure of these Directors
would be 21 years.
Moreover, if Argo in fact intends to search for ‘new Directors’ why not
select them from the slate of five independent nominees Voce has have
put forward so that shareholders can vote on them this year and
they can start working now? The only thing shareholders can know
for sure from Argo’s ‘refreshment’ pantomime is that the Board, and not
shareholders, will decide who leaves and who joins Argo’s Board. This
‘TBD Nominee’ tactic disenfranchises shareholders and is a poor
substitute compared to the option of real, certain and immediate change.
As a reminder, Voce has nominated five highly-qualified candidates for
election at the upcoming meeting, which ISS found to be ‘slate of
credible nominees seemingly well-suited to effect positive change.’1
This means that the choice for shareholders at this year’s Annual
Meeting is between the opportunity to elect their own representatives,
selected by fellow shareholders, or to blindly trust Argo’s Board. Even
in its 11th-hour conversion, once again Argo’s insular and
controlling Board has given shareholders no reason to do so.
Voce urges its fellow shareholders to vote on the BLUE
proxy card FOR its highly-qualified nominees – Bernard C. Bailey,
Charles H. Dangelo, Admiral Kathleen M. Dussault, Carol A. McFate and
Nicholas C. Walsh – and FOR its proposals. At an absolute minimum,
shareholders should vote on the BLUE
proxy card FOR Voce’s five removal proposals, which would immediately
retire the Big 5 Directors.
For more information, investors can visit www.Argo-SOS.com.”
About Voce Capital Management LLC
Voce Capital Management LLC is a fundamental value-oriented,
research-driven investment adviser founded in 2011 by J. Daniel
Plants. The San Francisco-based firm is 100% employee-owned.
Additional Information and Where to Find It
Voce Catalyst Partners LP, Voce Capital Management LLC, Voce Capital
LLC, and J. Daniel Plants, (collectively, the “Participants”) filed with
the Securities and Exchange Commission (the “SEC”) a definitive proxy
statement and accompanying form of proxy on April 12, 2019 to be used in
connection with the solicitation of proxies from the members of Argo
Group International Holdings, Ltd. (the “Company”). All members of the
Company are advised to read the definitive proxy statement and other
documents related to the solicitation of proxies by the Participants
when they become available, as they will contain important information,
including additional information related to the Participants and
information about the Participants’ director nominees. The definitive
proxy statement and an accompanying proxy card will be furnished to some
or all of the Company’s stockholders and are, along with other relevant
documents, available at no charge on the SEC website at http://www.sec.gov/.
Cautionary Statement Regarding Forward-Looking Statements
All statements contained in this press release that are not clearly
historical in nature or that necessarily depend on future events are
“forward-looking statements,” which are not guarantees of future
performance or results, and the words “anticipate,” “believe,” “expect,”
“potential,” “could,” “opportunity,” “estimate,” “plan,” and similar
expressions are generally intended to identify forward-looking
statements. The projected results and statements contained in this press
release that are not historical facts are based on current expectations,
speak only as of the date of this press release and involve risks that
may cause the actual results to be materially different. In light of the
significant uncertainties inherent in the forward-looking statements,
the inclusion of such information should not be regarded as a
representation as to future results. Voce disclaims any obligation to
update the information herein and reserves the right to change any of
its opinions expressed herein at any time as it deems appropriate. Voce
has not sought or obtained consent from any third party to use any
statements or information indicated herein as having been obtained or
derived from statements made or published by third parties.
1 Permission to quote ISS was neither sought nor obtained
Contacts
Investor Contact:
Okapi Partners LLC
Bruce H. Goldfarb
/ Patrick J. McHugh
(212) 297-0720 or Toll-free (877) 259-6290
[email protected]
Media Contact:
Sloane & Company
Dan Zacchei / Joe
Germani
(212) 486-9500
[email protected]
/ [email protected]
