Calgary — Two analyst groups have come out in favor of Agrium Inc. in its battle with Jana Partner LLC. RBC Capital Markets said there is nothing wrong with the status quo and that splitting up Agrium would be too risky. Scotiabank said Jana’s credibility is dwindling, and that it was troubled by Jana’s golden leash on its five nominees to the Agrium board of directors. The nominees would reportedly receive a percentage of profits that Jana would earn on its Agrium investment within a three-year period, raising questions about conflict of interest, director independence, and long-term versus near-term performance. Scotiabank also gave Agrium’s management a favorable nod for its overall performance, and was not impressed with the prospect of splitting up the company. In the meantime, Jana has named the five Agrium board members that it hopes to replace with its own nominees. “We believe these five directors embody the lack of relevant distribution experience, passivity in the face of underperformance, lack of shareholder alignment, and entrenchment tactics of Agrium’s board that have caused Agrium to underperform,” said Jana. They include: Frank Proto, who has been on the board 20 years; Dr. Susan Henry, who has the second longest tenure at 11 years; Derek Pannell, with five years; Russell Horner, over eight years; and the recently appointed Mayo Schmidt, who was the former CEO of Viterra Inc. Jana chided some of these five for not owning much Agrium stock. Deborah Yedlin, a columnist for the Calgary Herald, came to the defense of Henry, noting that while she has bought only 100 shares, she has not accepted director fees, preferring instead to take Deferred Share Units, which she will collect upon leaving the board. Yedlin also touted Henry’s experience as former Dean of Agriculture at Cornell University and one of two women on the Agrium board. “In Henry, both in terms of gender and profession, Agrium benefits from a different perspective, which is important for the company and its shareholders.”
Transparency Across the Fertilizer Value-Chain