Voce Capital is calling for the removal of four additional members of Argo Group’s board of directors in a statement seeking a shareholder vote on its proposals for changes at the insurer.
The investment firm, which has criticised Argo for the insurer's “shockingly high” corporate expenses and has demanded a shakeup of its board, is seeking to remove Gary Woods, Hector De Leon, John Power, Mural Josephson as directors, according to a preliminary proxy statement filed with the US Securities and Exchange Commission on Thursday.
This came in addition to the firm’s earlier assertion that the appointment of director Samuel Liss, whose term is set to expire at the annual shareholders meeting, was “invalid under the company’s bye-laws and Bermuda law”.
Voce has made the same claim with respect to director Tony Latham.
“We are seeking to change five of the members of the Board, a minority, to ensure that the interests of the shareholders are appropriately represented in the boardroom,” Voce wrote in the proxy letter.
To fill what Voce claims are vacancies or available directorships, Voce seeks to elect Nicholas Walsh, Carol McFate, Rear Admiral Kathleen Dussault, and Bernard Bailey. Voce also seeks to elect Charles Dangelo.
Argo’s board is currently composed of 13 directors, five of whose terms expire at the annual shareholder’s meeting: F Sedgwick Browne, Liss, Kathleen Nealon, Al-Noor Ramji and John Tonelli.
In early February, Voce grew its stake in Argo to 5.6 percent with the intent to “enhance shareholder value” in the company.
Shortly after, the San Francisco-based firm released a public letter criticising alleged misuse of company funds and calling for a board makeover to improve RoE.
In response to Voce’s proxy Thursday, Argo did not have additional comment.
“It is disappointing that Voce Capital continues to engage in a campaign of misinformation to support its activist campaign to remove members of Argo’s well-qualified and experienced board,” Argo said in a statement Wednesday.
“As publicly announced on February 20, 2019, the board properly appointed messrs Latham and Liss to fill two vacancies, bringing the number of directors up to 13 as authorised by Argo Group’s bye-laws and Bermuda law.”
Voce said in the proxy statement it would additionally use its shares to vote against Argo’s 2019 omnibus incentive plan and against the advisory vote on approving the compensation of certain executives. However, it said it would vote for the approval of the appointment of Ernst & Young as the Company’s independent auditor for the fiscal year ending 31 December 31 2019.
“For the reasons set forth in this proxy statement, we do not believe that the current board of directors of the company is acting in the best interests of the company’s shareholders,” Voce wrote in the proxy statement.
On Tuesday, Argo issued a preliminary proxy statement in which it urged shareholders to vote down motions put forward by Voce at the upcoming annual shareholders’ meeting.
This included the five independent directors Voce nominated for Argo’s board.
Early on Wednesday, Voce responded by slamming Argo’s “laconic response” to its allegations of corporate expenses misuse and called into question the legitimacy of Liss and Latham' appointment to the insurer’s board.
Voce, now Argo’s fourth-largest shareholder, has said its board nominees will help to curb Argo’s “highly inappropriate corporate expenses, including personal use of corporate aircraft and housing, vanity sponsorships and many other frivolous expenditures”.