DEFA14A: Air Products Urges Shareholders to Vote for Company Nominees Amid Mantle Ridge Challenge

Air Products is urging shareholders to vote for its nominees on the WHITE proxy card at the upcoming 2025 Annual Meeting, emphasizing the board's commitment to a smooth CEO transition and long-term value creation, while cautioning against the disruptive influence of Mantle Ridge.

Summary

• Air Products is urging shareholders to vote for the company's nominees at the upcoming Annual Meeting on January 23, 2025.
• The company is in a proxy fight with Mantle Ridge, which is proposing its own nominees.
• Air Products' board is committed to a smooth CEO succession, with an announcement of a new President expected by March 31, 2025, and a CEO transition within three months of the new President joining.
• The roles of Chair and CEO will be separated, with a new independent Chair appointed, and Mr. Ghasemi will retire from the Board.
• The company highlights strong preliminary fiscal Q1 2025 earnings results, with GAAP EPS of $2.77 and adjusted EPS of $2.86.
• Air Products cautions against Mantle Ridge's nominees, questioning their qualifications and experience.
• The company emphasizes that Mantle Ridge has not provided any plan and that their actions could derail Air Products' hydrogen strategy and long-term value creation.
• Air Products encourages shareholders to discard any blue proxy card they may receive from Mantle Ridge and vote using the WHITE proxy card.

Sentiment

Score: 6

Explanation: The document conveys a mixed sentiment. While highlighting positive earnings and a clear succession plan, it also addresses the challenges posed by Mantle Ridge's activist campaign, creating uncertainty.

Positives

• The board is executing a thoughtful and controlled CEO succession plan.
• The board expects to split the Chair and CEO roles and appoint a new independent Chair.
• The company achieved strong preliminary fiscal Q1 2025 earnings results, exceeding the top end of its adjusted EPS guidance.
• Air Products has refreshed its board with outside perspectives, including two new nominees.
• Air Products is focused on long-term value creation and has a clear strategy for growth.

Negatives

• Mantle Ridge is running a disruptive campaign that could impede Air Products' progress.
• Mantle Ridge's CEO candidate, Eduardo Menezes, lacks public company CEO or board experience.
• One of Mantle Ridge's nominees, Dennis Reilley, has been accused of leaking confidential information in the past.
• Mantle Ridge has not provided any plan for Air Products' future.
• Mantle Ridge's actions could derail Air Products' hydrogen strategy and long-term value creation.

Risks

• The proxy contest with Mantle Ridge could create uncertainty and disruption.
• Mantle Ridge's nominees may not be qualified to lead Air Products.
• Mantle Ridge's actions could derail Air Products' hydrogen strategy and long-term value creation.
• Failure to execute the CEO succession plan smoothly could negatively impact the company.
• The company's financial performance could be affected by various factors, including economic conditions and competition.

Future Outlook

The company is focused on serving energy, environmental, and emerging markets and generating a cleaner future, including developing clean hydrogen projects.

Management Comments

• The Board has clearly articulated a CEO succession plan to ensure a smooth transition between Mr. Ghasemi and his successor.
• We are committed to providing an announcement of a new President no later than March 31, 2025, and expect the transition to the new CEO to occur within three months of the individual joining the Company.
• The Board also expects to split the Chair and CEO roles and appoint a new independent Chair, and Mr. Ghasemi will retire from the Board.
• We strongly urge that you vote your shares FOR ONLY Air Products Nominees.

Industry Context

Air Products, as a leading industrial gases company, faces increasing competition and pressure to innovate in the hydrogen market. The proxy fight with Mantle Ridge highlights the challenges companies face in balancing long-term strategy with short-term shareholder demands.

Comparison to Industry Standards

• Air Products competes with companies like Linde, Air Liquide, and Messer in the industrial gases sector.
• The company's focus on hydrogen projects aligns with the industry's broader push towards clean energy solutions.
• The proxy fight with Mantle Ridge is similar to activist investor campaigns seen at other large industrial companies.
• Air Products' market capitalization of $65 billion places it among the largest companies in the industrial gases industry.

Stakeholder Impact

• Shareholders are urged to vote to protect their investment in Air Products.
• Employees are encouraged to vote in favor of the company's nominees.
• The outcome of the proxy fight could impact the company's strategy and future performance, affecting all stakeholders.

Next Steps

• Shareholders need to vote on the proxy proposals by the deadline.
• The company will announce a new President no later than March 31, 2025.
• The CEO transition will occur within three months of the new President joining the company.
• The company will continue to execute its long-term strategy for growth and value creation.

Key Dates

Keywords

Air Products, Mantle Ridge, Proxy Fight, CEO Succession, Board of Directors, Shareholders, Annual Meeting, Earnings, Hydrogen, Industrial Gases