The New York-based investment advisor has nominated eight directors to Corteva’s 12-person board and wants to replace Collins over his “incredibly disappointing” performance, also pointing to the CEO’s past track record as being “littered with missed expectations and promises.”

Starboard managing member Jeffrey Smith set out the proposed actions in a letter dated Jan. 21 to Corteva’s chairman of the board, Gregory Page. The activist investor, which reportedly held a stake of about 1.6% as of October 2020, has had an ongoing dialog with Corteva about its lacklustre performance since autumn 2020.

Corteva was spun out of DowDuPont as an independent public company in June 2019. Smith said that since Starboard’s initial investment over 18 months ago, “we have watched with increasing dismay as management continues to take credit for achieving ever-increasing synergy milestones without consequent improvement in profitability.

 “A litany of missed promises and unforced errors have furthered our conviction that current leadership is ill-equipped to maximize the value of Corteva’s assets,” he added.

In response, and citing unanimous backing from the board for Collins, Page said Corteva had made significant progress in a short period of time, although the company recognized there was still more work to do. “Looking ahead,” he commented, “we believe we are at an important inflection point in our company’s trajectory as the extensive investments we have made to enhance productivity over the last 18+ months will begin to accelerate their impact on earnings. We believe we are just beginning to realize the value creation opportunity we have been targeting,”

In January 2020, Starboard nominated nine directors to the board of GCP Applied Technologies, after strongly criticizing the construction products group’s financial and operating performance. GCP subsequently elected eight Starboard-nominated directors to its board in May 2020.

The US investor was not so successful with its plans for Bristol-Myers Squibb (BMS). Starboard bought a 1 million share in BMS and nominated five directors to the US pharma’s board in early 2019. It tried to block BMS’ merger with Celgene later that year, describing the move as “poorly conceived and ill-advised.”

However, Starboard backed off when independent proxy advisory firms Institutional Shareholder Services and Glass Lewis recommended that BMS shareholders vote in favor of the takeover. The deal, which completed in November 2019, saw Celgene become a wholly owned subsidiary of BMS.

Author: Elaine Burridge, Freelance Journalist