Reminds Shareholders that the Incumbent Board Awarded Ex-CEO Denise
Morrison $60+ Million Over 7 Years Despite the Company’s Share Price
Stagnation and Numerous Strategic Blunders that Occurred on Her Watch
Questions the Decision to Install Board Member Keith McLoughlin as
Interim CEO and Pay Him Almost $4 Million to Hold the Wheel While
Campbell Takes Its Time Finding a Permanent Leader
Highlights Enormous Executive Pay Even While the Company’s Shares Are
Down 20% This Year Alone
After Considering the Current Board’s History of Destroying Your
Value, We Urge Shareholders to VOTE THE WHITE CARD to Elect the
Independent Slate and End This Reign of Error
NEW YORK–(BUSINESS WIRE)–Third Point LLC (LSE: TPOU) (“Third Point”), a New York-based investment
firm managing approximately $17 billion in assets and a holder of
approximately 7% of the outstanding common shares of Campbell Soup
Company (NYSE: CPB) (“Campbell” or the “Company”), has mailed a detailed
letter to shareholders regarding Campbell’s record of wantonly spending
shareholder money for poor CEO performance that is not linked to
positive performance. The full
text of the letter can be found here and below.
As a reminder, we encourage all shareholders to also review our
Case for Change to understand more about why the Independent Slate
will respect shareholder voices, end the Entrenched Board’s reign of
error, and set Campbell on a new and profitable path. We urge all
shareholders to VOTE
THE WHITE CARD to elect the Independent Slate.
November 7, 2018
Dear Fellow Campbell’s Shareholder,
When we read that CEO Denise Morrison – who
“resigned” in May – had taken over $60 million and run while the stock
price barely moved during her seven years in charge, we knew
shareholders had been taken for a ride.
We write today to ask you to VOTE THE WHITE CARD
because the Incumbent Board has carelessly given tens of millions of
dollars to lousy leaders. You deserve a Board who spends your
money carefully and wisely on CEOs who create shareholder value and
promote employee interests.
The Facts on Executive Compensation:
The Incumbent Board boasts that it has created an executive compensation
program that is aligned to performance. One of a board’s most important
responsibilities is to have a program that sets compensation fairly and
thoughtfully, while carefully stewarding shareholder capital. We were
skeptical when we saw the results of this Board’s “processes” with
ex-CEO Morrison. Considering how wastefully the Incumbent Board uses
shareholder money in areas like protecting their own secrets rather than
being transparent with shareholders,1 we decided we should
investigate how they pay their CEOs.
WE WERE RIGHT: THE COMPENSATION PROGRAM SERVES
EXECUTIVES, NOT SHAREHOLDERS OR EMPLOYEES. The compensation
program has failed. We believe it failed because the Incumbent Board was
either asleep at the wheel or made affirmatively horrendous decisions to
continue awarding million-dollar payments to executives who were not
driving long-term value.
Overpaying the Last CEO
This failure is abundantly clear when reviewing the last CEO’s excessive
compensation. Ms. Morrison became CEO effective July 31, 2011, and the
stock price on the previous day was $33.05. On the day she “retired”,
May 18, 2018, the closing stock price was a little over $1 higher, while
the S&P had more than doubled. Yet, during her tenure, Campbell’s Board
saw fit to lavish Ms. Morrison with discretionary “performance” bonuses
EVERY year. Exactly what performance were they paying for?
In Ms. Morrison’s final two years at the company, long after it should
have become clear to any competent board that she had committed a series
of strategic, financial and operational blunders that put your Company
at risk, she pocketed almost $16 million in total compensation. As if
that were not enough, in connection with her “retirement,” the Incumbent
Board handed her another $2.3 million on the way out the door. The Board
referred to this sum as “104 weeks of severance pay,” which is odd
considering that she allegedly decided to “retire”. We have heard of
company-sponsored retirement parties with ice cream cakes, but never a
company-sponsored showering of over $2 million in shareholder money to a
A CEO performing so poorly should have been
fired, not awarded $16 million over her last two years and handed an
extra $2 million just to leave. Instead,
the Incumbent Board let her take the money and run. Shareholders
Did the Board Learn From Its Mistakes?
No! When Ms. Morrison left, the Incumbent Board responded by installing
one of its own, Keith McLoughlin, former chief executive of a vacuum
cleaner company. While a board member stepping in as an interim CEO
should, in our view, receive an appropriate stipend, we are shocked at
the amount this Board has decided to bestow on an insider to simply hold
the wheel while the Company takes its time – nearly six months and
counting – to find a permanent leader after finding itself left in the
lurch when it failed in its essential duty to plan for succession.
Once again, this Board is giving away your money without any
connection to performance. Mr. McLoughlin is being paid a base
salary of more than $1 million and received a shockingly high $3
million restricted stock grant, which vests in full when a successor
CEO is appointed (or, if earlier, 12 months from the date of the grant).
What has Mr. McLoughlin done to show shareholders he deserves this
compensation package? It cannot be that the Incumbent Board believed Mr.
McLoughlin would instill a sense of confidence in the market; the
stock lost $1.5 billion in value on the day he was appointed. The
Incumbent Board’s failure to plan for Ms. Morrison’s successor has
resulted in a windfall for one of their own. Shareholders deserve
The Facts on the Independent Slate’s Plan:
Third Point is confident we can identify a world-class CEO who will
modernize products, improve employee morale, and help shareholders. We
have done this before, serving on the compensation committees of other
public companies and looking out for shareholder interests first. Third
Point is determined to bring a culture of accountability, with greater
board engagement and fair pay for performance. No one minds paying
fairly for a CEO who benefits everyone but paying tens of millions of
dollars to a CEO who benefitted almost no one is just insulting.
The Independent Slate is running to replace the Incumbent Board because
we believe that with a flat stock price over 20 years, Campbell has been
focused on serving someone other than its public shareholders and
Your Vote Is Important, No Matter How Many or How Few Shares You Own!
PLEASE REMEMBER TO CAN THE COMPANY’S CARD! If you return
a Campbell’s proxy card – even by simply indicating “withhold” on the
Company’s slate – you will revoke any vote you had previously submitted
for the Third Point nominees on the WHITE proxy card.
On September 28, 2018, Third Point LLC filed a definitive proxy
statement and on October 1, 2018 filed Supplement No. 1 thereto and on
October 9, 2018 filed Supplement No. 2 thereto (collectively, the
“Definitive Proxy Statement”) with the U.S. Securities and Exchange
Commission (“SEC”) to solicit proxies from stockholders of Campbell Soup
Company (the “Company”) for use at the Company’s 2018 annual meeting of
stockholders. THIRD POINT STRONGLY ADVISES ALL STOCKHOLDERS OF THE
COMPANY TO READ THE DEFINITIVE PROXY STATEMENT BECAUSE IT CONTAINS
IMPORTANT INFORMATION. THE DEFINITIVE PROXY STATEMENT ALSO INCLUDES
INFORMATION ABOUT THE IDENTITY OF THE PARTICIPANTS IN THE THIRD POINT
SOLICITATION AND A DESCRIPTION OF THEIR DIRECT OR INDIRECT INTERESTS
THEREIN. The Definitive Proxy Statement is available at no charge on
the SEC’s website at http://www.sec.gov
and is also available, without charge, on request from Third Point LLC’s
proxy solicitor, Okapi Partners LLC, at (855) 208-8902 or via email at CPBinfo@okapipartners.com.
1 Third Point is currently
pursuing a case in a New Jersey court asking the Incumbent Board to
provide full and fair disclosures about a number of issues, including
the Board’s decision to lavish Ms. Morrison with a generous severance
package despite the Company’s abysmal performance during her tenure.
Rather than making these important disclosures to you, the Company’s
owners, it is spending hundreds of thousands of Company dollars – and
counting – to keep this information from you.
Third Point LLC
Elissa Doyle, 917-748-8533