Impactive Capital plans proxy fight at WEX, seeking at least four directors
Impactive, which owns roughly 7 per cent of the company and has been a shareholder for four years, is ratcheting up pressure on the payments company only days after its May 15 annual meeting.
WEX's share price has slid 30 per cent over the last 12 months.
"We intend to nominate at least four directors for election at next year's annual meeting, barring a significant reversal of the company's underperformance or approach to engagement in the coming months," Impactive said in a statement confirming an earlier exclusive report by Reuters that the firm was preparing a challenge.
WEX, whose services include payment processing and information management for vehicle fleets, employee benefits, business payments and travel payments, has a market value of roughly $4.5 billion.
Impactive, run by Lauren Taylor Wolfe and Christian Asmar, has privately pressed WEX to simplify its business and create greater alignment between the company and its shareholders but feels its requests have been dismissed, said a person familiar with the discussions who was not authorized to speak publicly.
Specifically, Impactive urged WEX to consider spinning off its benefits segment and suggested adding an investor to the 11-member board of directors, according to the person, who said Impactive asked late last year to join the board.
WEX said members of its management team had spoken with Impactive's principals dozens of times over the last three years. "It was not until late last year that Impactive requested Board representation. We have a history of constructive engagement and intend to continue those conversations," the company said in a statement.
Despite its strong market positioning, attractive assets and competitive advantages, WEX has underperformed and lagged behind peers, including Corpay, Impactive said earlier this month in a public letter to shareholders.
In an effort to exert pressure, Impactive said on May 2 that it would vote against three directors, including the company's chair, Melissa Smith, and lead director, Jack VanWoerkom, at the May 15 meeting.
While all three were re-elected, shareholders' support for each director targeted by Impactive was at least 33 per cent lower than the previous year, according to a regulatory filing, signaling some concern.
Impactive has only run one proxy fight during its seven-year lifetime and has said it prefers to engage with companies and management privately to fix problems.
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