Argo-Voce ‘pantomime’ boils over as activist shareholder accuses Argo of ‘deception’

The tit-for-tat between Argo Group and activist investor Voce Capital Management rumbles on with the latter now accusing Argo’s promise to shrink the size of its board to ten from 13 as a “deception”, which there is no guarantee will be followed through.

Voce accused Argo of “quietly” filing an addition to its proxy materials suggesting that it expects its board to decrease back to ten members from 13 over the next three years. Voce said this in no way solves its major concerns and that there is no guarantee Argo will follow through on this.

Argo has stressed that the moves to shrink the size of the board were underway anyway and would have happened regardless of the recent campaign by Voce. It has said the board was expanded to allow new members to gain experience ahead of other longer serving members retiring.

But Voce, which wants shareholders to agree to its suggestion to add five of its nominations to the board, disagrees.

“In response to our criticisms, Argo’s whispered assurances that it has ‘expectations that the existing size of the Board (13) will decrease back to 10 members over the next three years’ i.e., 2022, in no way addresses our concerns nor provides the changes required to confront Argo’s immediate needs,” Voce said.

“We believe this last-minute legerdemain, devoid of any details or even a firm commitment to follow through on it, is designed to mollify shareholders disillusioned by Argo’s poor corporate governance and over-tenured board rather than to confront the changes represented by the proposals and slate Voce has put forward this year. In fact, the board’s subsequent May 14, 2019 letter to shareholders, issued the very next day, made no mention whatsoever of this concept – further illustrating its lack of credibility.”

The activist shareholder went to stress that shareholders till do not know who will retire and who might be added – and what the recruitment process will be.

“The absurdity of this deception is magnified by Argo’s staggered board, which grants directors three-year terms. If, as Argo now seems to begrudgingly acknowledge, some of its directors are long in the tooth, why grant them a three-year swan song?” it said.

It added: “If Argo in fact intends to search for ‘new Directors’ why not select them from the slate of five independent nominees Voce has have put forward so that shareholders can vote on them this year and they can start working now? The only thing shareholders can know for sure from Argo’s ‘refreshment’ pantomime is that the Board, and not shareholders, will decide who leaves and who joins Argo’s board. This ‘TBD Nominee’ tactic disenfranchises shareholders and is a poor substitute compared to the option of real, certain and immediate change.”

Voce also again urged shareholders to vote on the blue proxy card – instead of the white one – ahead of the company’s AGM later this month.

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