Voce rejects Argo’s defence on corporate spend and publishes flight logs
Activist investor Voce Capital has hit back at Argo after the insurer published a detailed defence rejecting allegations of misuse of corporate funds and urging shareholders to ignore blue proxy ballots sent out by Voce.
In a statement today, Voce said: “It’s not surprising to us that Argo’s recently-issued letter to shareholders is replete with selective and misleading attempts to explain away the multitude of issues that Voce has raised with respect to the company’s excessive expenses and misuse of corporate assets.”
It said that after careful review of Argo’s materials “we believe that its responses raise yet more questions… to which shareholders deserve honest and complete answers.”
Voce claimed that Argo’s responses were “especially deficient” around its justification for three aircraft and global corporate housing, which the investor claimed Argo had defended by citing its “rising stock price”.
The campaigners repeated their objections to the company's use of corporate aircraft, which it alleged were also used for personal trips by CEO Mark Watson III.
“We reiterate our fundamental point that the employees of a small company like Argo, whose offices are in global financial hubs, should utilise the abundant commercial flights available when traveling. The multi-million dollar annual expense for a company of Argo's size to carry such aircraft [G-5] is completely unjustified.”
In a bid to force Argo to give a more detailed explanation Voce has published what it said were “all flight logs for Argo’s G-5 since 2016” on its website www.Argo-SOS.com.
The investor also questioned the veracity of Argo’s explanations for its corporate housing programme, particularly in New York and Bermuda. The statement said: “Argo’s indignation is somewhat puzzling. Argo appears to be quibbling over the location of Argo’s corporate loft for Mr. Watson rather than its existence.”
It added: “We took exception to Argo’s provision of Bermuda housing to Mr. Watson in light of the $2.9 million relocation bonus it had previously paid him, ostensibly to move to Bermuda. Subsequently, the company announced the termination of the housing stipend, but notably did not acknowledge or address the long-term lease that we believe Argo undertook for Mr. Watson’s benefit at ‘The Jungle’ a luxurious villa along billionaire’s row that has served as his private home when he’s in Bermuda.”
The investor also asked “why doesn’t Argo disclose the exact amounts it spends on its various sponsorships, so shareholders can assess whether they constitute a “modest cost” as the company argues?”
It reiterated concerns about sponsorship of “yacht regattas, Grand Prix cars and the like”, which it said “align with CEO Watson’s description of himself (on his now inactive ‘personal’ website, owned and operated by Argo) as ‘a sailor, runner, climber and car racing enthusiast’.”
Voce added that it intends to release detailed plans next week to improve Argo’s return on equity to “unlock substantial shareholder value”.
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