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Starboard argues Huntsman needs new directors to achieve promises -Breaking


© Reuters.

By Svea Herbst-Bayliss

BOSTON, (Reuters) – Starboard Value LP, an activist investment company is arguing for a more conservative approach to investing. Huntsman To ensure chemical company delivers on its promise to shareholders, (NYSE:) Corp investors need to elect the directors.

Starboard (which owns 8.6% of Huntsman) launched a proxy contest and nominated four individuals to its board in January.

The hedge fund and company have presented their arguments to Institutional Shareholder Services, a proxy advisory firm. They will then make a recommendation for shareholders prior to the March 25 vote.

Starboard claims that the company has failed repeatedly to fulfill its promises to shareholders. Starboard also believes Huntsman will disappoint shareholders once again, unless four new directors bring accountability and independence to the board.

According to the company, hedge funds have “ignored our record 2021 results and strong outlook for 2022 which were reflected in our all time high share price.” These results speak for themselves and confirm that this refreshed board is holding management accountable for the company’s performance.”

Huntsman promised last year to increase margins and return $1 billion to shareholders via share repurchases. He also pledged not to spend over $500 million on one acquisition. Huntsman was also tasked with running a sales process in the unit of non-core Textile Effects.

Starboard thinks the company has the potential to increase its margin by 600 basis point. Starboard supports Huntsman’s efforts, but the hedge fund is concerned that some incumbent board members won’t push management to achieve these goals.

Due to governance issues, the hedge fund would like to replace Cynthia Egan and Jose Munoz who were both added this year as part of a Huntsman restructuring.

Starboard also targets Mary Beckerle (NYSE:) and Daniele Ferrari, two directors Starboard claims are in conflict. They are seeking to be replaced by chemical industry veterans, including ex-directors. LyondellBasell Industries (NYSE: CEO James Gallogly, Starboard’s managing director Jeffrey Smith.

Starboard noted that Huntsman had not provided disclosures as recommended by Task Force on Climate Related Financial Disclosures, even though they were requested two years prior.

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