Air Products Seeks Shareholder Support to Fend Off Investor Group’s Board Nominees

— Jeff Ward, Lehigh Valley News Briefs

The future of Air Products may come down to a vote next month.

Activist investor Mantle Ridge has put up nine candidates for the Board of Directors of the industrial-gas maker. Air Products wants to stay the course, and has proposed its own candidates.

Air Products (NYSE:APD) has created a website to promote is stance in this proxy battle, link above.

From the company website:

Although Air Products is required to include all nominees for election on its universal proxy card, Air Products does not endorse any of the Mantle Ridge nominees or Mantle Ridge’s proposal to amend the Bylaws (the “Bylaw Proposal”) and recommends shareholders vote “FOR” only each of the Air Products’ director nominees recommended by your Board:

Tonit M. Calaway, Charles (“Casey”) Cogut, Lisa A. Davis, Seifollah (“Seifi”) Ghasemi, Jessica Trocchi Graziano, Edward L. Monser, Bhavesh V. (“Bob”) Patel, Wayne T. Smith, and Alfred Stern

Earlier this year, Mantle Ridge challenged Air Products’ board, leadership and capital strategy.

Chief Executive Officer Seifi Ghasemi has steered the company to be what he calls a “first mover” into the market for “green hydrogen” as a replacement for fossil fuel in industry and heavy transport.

Green hydrogen does not refer to a color, but to the process of making hydrogen by splitting water, using electricity from renewable sources (solar power, wind). That method does not generate emissions of carbon dioxide, a greenhouse gas that is linked to global warming.

Ghasemi is also chairman and president of the company. He is 80, and has said the company is looking for a successor, though Ghasemi has given no indication of when he will leave.

The U.S. Inflation Reduction Act subsidizes the transition to clean energy, and Ghasemi contends that Europe will need green hydrogen as it moves to a clean-energy economy.

Mantle Ridge has questioned the company’s direction and its use of capital.

Here is what Air Products has to say:

Guided by our experienced Board of Directors and management team, Air Products is executing a two-pillar growth strategy to continue profitably growing our core industrial gas business while capitalizing on our first-mover advantage in the clean hydrogen market, which we believe will produce tremendous value for our shareholders over the long-term.

We continue to take a disciplined approach to capital allocation and are conducting a thoughtful succession planning process to identify a President to serve as a qualified successor to Mr. Ghasemi – a process driven by our Lead Independent Director and with the support of the full Board and an executive search firm.

Here is a letter to shareholders from the company.

At 10:40 a.m. today (Monday, Dec. 16) shares of Air Products traded at $307.97. At that price, the company has a market capitalization of $68.5 billion.

Air Products is based in Upper Macungie Township and is the largest company based in the Lehigh Valley. Its meeting of shareholders will be Jan. 23.

— Disclosure: I own shares in Air Products as part of a buy-and-hold strategy.