Big changes coming to Air Products; CEO out
Changes are happening at one of the Lehigh Valley's largest employers.
Air Products announced Thursday it's adding three new independent directors to its Board of Directors and three current directors will retire. The company also announced Chairman and CEO John McGlade will retire in 2014. He was named president and CEO in 2007 and chairman of the board in 2008.
Someone else getting attention during this is Bill Ackman, the CEO of Pershing Square, Air Products' largest shareholder. The company owns almost ten percent of Air Produts, or $2.2 billion.
"9.8 percent shares is a lot of shares of a company and management better listen to someone who is holding that stake in the company," said Parveen Gupta, Professor and Chair and the Accounting Department at Lehigh University.
He explained the role of activist investors like Ackman. He said, "They acquire large stakes in the public companies and they normally acquire stakes in those companies where they feel they are underperforming."
"They are obviously thinking there is room for improvement and companies can do better, or that particular company
in which they are acquiring the stake can do better, and then go ahead and they share their thought process, plan, strategy, vision," he added.
Gupta pointed out Ackman is well known and has been in the spotlight before.
"He was in the news in JC Penney recently," he said.
"I would surmise based on what I've read in the news that conversations occured between Mr. Ackman and his company and Air Products and I suppose there must be some differences of opinion with regard to the future direction of the company," said Gupta. "There may be differences of opinion or Mr. Ackman, holding 9.8 percent shares, since he gets media attention, he has a bit more clout than just a 9.8 percent investor would have."
"He has the power in the sense he has made some good investments in the past and people listen to him," he said about Ackman.
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