|By PR Newswire||
|February 20, 2013 12:00 PM EST||
NEW YORK, Feb. 20, 2013 /PRNewswire/ -- JANA Partners LLC today released the following open letter to shareholders of Agrium, Inc. ("Agrium") (TSX / NYSE: AGU). Agrium announced at the end of the day last Friday that its Annual General Meeting of Shareholders will be held on April 9, 2013 and that shareholders of record on February 25, 2013 will be eligible to vote.
February 20, 2013
AN OPEN LETTER TO AGRIUM SHAREHOLDERS:
Why We Said No to the Status Quo at Agrium, and Why You Should Too
Dear Fellow Agrium Inc. Shareholder,
We have invested more than $1 billion in Agrium, making us the largest shareholder with approximately 6.5% of its outstanding shares, because we believe Agrium can generate substantial additional upside for all shareholders by addressing 5 core issues: Costs, Controls, Capital Allocation, Conglomerate Structure and Corporate Governance. Agrium however refuses to fully address these issues, and has subverted traditional notions of good governance by fighting off our highly qualified independent nominees and choosing their own directors merely because we have questioned its performance and strategy. We note that the market has had a swift and negative reaction to this refusal to engage, including a 7% share price decline last week after Agrium's new directors were announced and our rejection of its insufficient settlement offer.
Upending Notions of Good Corporate Governance. Agrium has sought to turn traditional notions of board oversight of management upside down by making any questioning of management's prior performance or strategy a disqualification for board service. When asked recently why Agrium refused to consider our candidates, Agrium's CEO responded that "It is not typical to bring someone on the board who tells you your strategy is flawed and indirectly tells you you're incompetent." (The Globe & Mail, Feb. 4, 2013). JANA has of course never called management "incompetent." We have simply identified areas of substantial opportunity and proposed qualified nominees to help explore them. This same fortress mentality was on display in our recent settlement discussions, with Agrium demanding at one point that we drop all of our issues in exchange for merely proceeding with talks, and refusing to even speak to our nominees.
This thin-skinned and insular attitude leads us to conclude that Agrium's new directors have been pre-screened to ensure compliance with the status quo. We further note that Agrium did not cast a very wide net to locate new board appointee Mayo Schmidt, given that Viterra's distribution business was acquired by Agrium in a transaction in which he earned over C$30MM. We also note that our board nominees stand to benefit only to the extent that all shareholders benefit and each meets the definition of "independence" under the CBCA, NYSE rules, and Agrium's own governance guidelines.
Just last Friday, Agrium doubled-down on its approach, shifting up the usual date of its annual meeting by over a month in an apparent attempt to cut short this debate. While we are confident that this move is too little, too late, it further paints a picture of serious governance issues at Agrium. As one analyst put it, "Friday after the close at the start of a holiday weekend isn't typically when company Boards disclose things they are proud of, but you can't fault the Agrium Board for consistency. An abrupt shift in the dates for the shareowner meeting looks designed to perpetuate the lack of transparency and accountability that seems to be the (very) unexpected legacy of CEO Mike Wilson. Investors who have been supportive of Agrium thus far will have to think hard about whether this is the sort of behavior they want to encourage elsewhere, when they cast their ballots in this accelerated election." (Credit Agricole / CLSA, Feb. 19, 2013)
Refusal to Address Core Issues. When Agrium approached us seeking a settlement, we made clear that for any settlement to occur the board would need to commit to conducting a full review of the branch footprint of its distribution business ("Retail") and corporate overhead (Costs) and a full review of Retail senior management performance objectives (Controls), to communicate a targeted dividend payout ratio or some other mechanism to clarify ongoing capital return plans (Capital Allocation) and to retain a new investment bank to perform a review of Agrium's structure (Conglomerate Structure), in addition to adding highly-qualified and independent new directors rather than fighting off such change (Corporate Governance). Agrium however refused to commit to even the mildest versions of these concepts.
Appointing New Directors Who Lack Relevant Experience. Neither of Agrium's chosen new directors addresses the board's lack of distribution experience, which is of crucial importance given the size of Agrium's Retail business.
- Mayo Schmidt. While Mr. Schmidt served as CEO of Viterra Inc. before it was acquired by Glencore and Agrium, Viterra's distribution business accounted for less than 15% of EBITDA and served primarily to advance its grain handling business. Agrium has also noted significant opportunities for improvement at Viterra's distribution business, which calls into question Mr. Schmidt's abilities in areas like cost management. We also note that like Agrium, Viterra struggled in basic areas of oversight and performance including Costs, given Viterra's consistently high annual growth rate in corporate overhead, and Capital Allocation, given that Viterra executed no share repurchases (instead issuing over $2 billion of equity) and initiated a small dividend only after coming under pressure from shareholders to do so.
- David Everitt. Mr. Everitt ran a unit at Deere & Co. that manufactured and sold capital equipment to a separate independently-owned and operated dealer network. While he has experience in agriculture and with manufacturing and supply chain issues, he brings no experience in managing true "breaking bulk" distribution of primarily third party manufactured products, which is a crucial gap given that Agrium's Retail business purchases the vast majority of its products from third party suppliers and breaks bulk to distribute to farmer customers.
By contrast, 3 of our 5 nominees bring more than 75 years of combined experience creating substantial value in true "breaking bulk" distribution and excellent track records of deploying capital with a true owner orientation.
Questions for Every Shareholder.
- Wouldn't a board more concerned with good governance and continuous improvement than avoiding criticism have agreed to merely fully explore the issues we set forth above, given the billions in potential value creation?
- Why would the board resist adding a minority of new directors who actually have the experience to ask the right questions about Retail's operations and strategy?
- Why would a board that has spent $4 billion on Retail acquisitions that have failed to meet Agrium's minimum return hurdle and which failed for years to engage in significant shareholder return of capital until pressured to do so refuse to simply clarify its ongoing capital return plans?
- Why would a board that has overseen a 14% annual growth rate in corporate overhead, has a Retail footprint which by Agrium's own admission and measurement standards has a glaring degree of duplication, and has generated negative operating leverage refuse to consider seriously examining its costs?
- If Agrium's conglomerate structure truly creates more value than a separation, why is the board so resistant to an independent and fair review, particularly given the flaws in its initial review including manipulating trading comparables and hiring advisors who once argued against Agrium's structure to now defend it, and given that our nominees will constitute only a minority of the board once elected?
- Why would a board that has consistently set compensation targets for Retail management that prioritize growth through acquisitions over profitability refuse to an enhanced review of these compensation targets and objectives?
- Why would a board that has overseen a litany of corporate governance failings including talking down its own value to avoid a debate, botching a significant share repurchase, accelerating its annual meeting date and more resist adding independent and shareholder-oriented new directors?
We believe the board should be saying yes to these opportunities to unlock Agrium's full value creation potential, rather than wasting substantial shareholder money fighting them off, and we remain confident that once our highly qualified and shareholder-focused director candidates are elected, the board will do so.
JANA Partners LLC
Information in Support of Public Broadcast Solicitation
JANA is relying on the exemption under section 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations to make this public broadcast solicitation. The following information is provided in accordance with corporate and securities laws applicable to public broadcast solicitations.
This solicitation is being made by JANA, and not by or on behalf of the management of Agrium.
The address of Agrium is 13131 Lake Fraser Drive S.E., Calgary, Alberta T2J 7E8.
JANA has filed an information circular containing the information required by Form 51-102F5 – Information Circular in respect of its proposed nominees, which is available on Agrium's company profile on SEDAR at www.sedar.com and at www.JANAAguAnalysis.com.
Proxies for the Agrium shareholders' meeting may be solicited by mail, telephone, email or other electronic means as well as by newspaper or other media advertising, and in person by managers, directors, officers and employees of JANA, who will not be specifically remunerated therefor. In addition, JANA may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable Canadian corporate and securities laws, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable Canadian laws. JANA may engage the services of one or more agents and authorize other persons to assist it in soliciting proxies on behalf of JANA. All costs incurred for the solicitation will be borne by JANA.
JANA has entered into agreements with Kingsdale Shareholder Services Inc. ("Kingsdale") and The Laurel Hill Advisory Group Company ("Laurel Hill") pursuant to which Kingsdale and Laurel Hill have agreed to assist JANA in soliciting shareholders should JANA commence a formal solicitation of proxies. Kingsdale's responsibilities will principally include advising JANA on governance best practices, where applicable, liaising with proxy advisory firms, developing and implementing shareholder communication and engagement strategies, and advising with respect to meeting and proxy protocol. Laurel Hill will be principally responsible for the solicitation of retail shareholders and other strategic advice. Pursuant to the agreement with Kingsdale, for its solicitation services, Kingsdale would receive a fee in the range of $125,000 to $250,000, plus disbursements and a telephone call fee. In addition, Kingsdale may be entitled to a success fee on the successful completion of JANA's solicitation, as determined by JANA in consultation with Kingsdale. Kingsdale will also receive a separate fee for its other services. Pursuant to the agreement with Laurel Hill, Laurel Hill would receive a fee of up to $100,000, plus disbursements and a telephone call fee. In addition, Laurel Hill will be entitled to a success fee of $100,000 on the successful completion of JANA's solicitation. All costs incurred for the solicitation will be borne by JANA.
JANA is not requesting that Agrium shareholders submit a proxy at this time. Once JANA has commenced a formal solicitation of proxies, a registered holder of common shares of Agrium that gives a proxy may revoke it: (a) by completing and signing a valid proxy bearing a later date and returning it in accordance with the instructions contained in the form of proxy to be provided by JANA, or as otherwise provided in the final proxy circular, once made available to shareholders; (b) by depositing an instrument in writing executed by the shareholder or by the shareholder's attorney authorized in writing, as the case may be: (i) at the registered office of Agrium at any time up to and including the last business day preceding the day the meeting of Agrium shareholders or any adjournment or postponement of the meeting is to be held, or (ii) with the chairman of the meeting prior to its commencement on the day of the meeting or any adjournment or postponement of the meeting; or (c) in any other manner permitted by law. A non-registered holder of common shares of Agrium will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary.
To the knowledge of JANA, neither JANA nor any of its managers, directors or officers, or any associates or affiliates of the foregoing, nor any of JANA's nominees, or their respective associates or affiliates, has: (i) any material interest, direct or indirect, in any transaction since the beginning of Agrium's most recently completed financial year or in any proposed transaction that has materially affected or would materially affect Agrium or any of its subsidiaries; or (ii) any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter currently known to be acted upon at the meeting of Agrium shareholders other than the election of directors.
SOURCE Jana Partners LLC
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Yet a closer inspection at the data reveals less than half of these cloud projects involve production...
Nov. 29, 2015 07:00 AM EST Reads: 486
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Nov. 29, 2015 06:45 AM EST Reads: 737
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true change and transformation possible.
Nov. 29, 2015 06:00 AM EST Reads: 549
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Nov. 29, 2015 06:00 AM EST Reads: 372
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" in this scenario: microservice A (releases daily) depends on a couple of additions to backend B (re...
Nov. 29, 2015 05:00 AM EST Reads: 458
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Nov. 29, 2015 04:30 AM EST Reads: 483
Container technology is shaping the future of DevOps and it’s also changing the way organizations think about application development. With the rise of mobile applications in the enterprise, businesses are abandoning year-long development cycles and embracing technologies that enable rapid development and continuous deployment of apps. In his session at DevOps Summit, Kurt Collins, Developer Evangelist at Built.io, examined how Docker has evolved into a highly effective tool for application delivery by allowing increasingly popular Mobile Backend-as-a-Service (mBaaS) platforms to quickly crea...
Nov. 29, 2015 04:00 AM EST Reads: 373
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
Nov. 29, 2015 03:00 AM EST Reads: 592
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.
Nov. 29, 2015 03:00 AM EST Reads: 337
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Ben Perlmutter, a Sales Engineer with IBM Cloudant, demonstrated techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, faster user experience, both offline and online. The focus of this talk was on IBM Cloudant, Apache CouchDB, and ...
Nov. 29, 2015 02:45 AM EST Reads: 421
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Nov. 29, 2015 01:00 AM EST Reads: 436
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical to maintaining positive ROI. Raxak Protect is an automated security compliance SaaS platform and ma...
Nov. 28, 2015 08:00 PM EST Reads: 433
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Nov. 28, 2015 01:00 PM EST Reads: 479
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
Nov. 28, 2015 12:00 PM EST Reads: 341
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound cha...
Nov. 28, 2015 12:00 PM EST Reads: 555
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, demonstrated examples of com...
Nov. 28, 2015 11:45 AM EST Reads: 408
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
Nov. 28, 2015 11:15 AM EST Reads: 417
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Nov. 28, 2015 11:00 AM EST Reads: 517
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Nov. 28, 2015 10:30 AM EST Reads: 316
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
Nov. 28, 2015 10:00 AM EST Reads: 199