Bath & Body Works Says Loeb Tried to Oust Director He Recommended

(Bloomberg) — Bath & Body Works Inc. said Dan Loeb’s Third Point LLC tried to oust a retail expert it had recommended for the company’s board because one of the activist investor’s former employees had been rejected.

The fragrance and personal care retailer said in a letter to investors Monday that Third Point wanted the company to withdraw the appointment of Lucy Brady, president of grocery & snacks at Conagra Brands Inc., after the board refused to also place Munib Islam on the board. Bath & Body Works interviewed both candidates at the recommendation of Third Point, which is now threatening a proxy battle.

“The history of the company’s engagement with Third Point makes clear that this potential proxy contest is solely the result of the board’s unwillingness to accede to Mr. Loeb’s singular demand to put Munib Islam, Third Point’s former co-chief investment officer and Mr. Loeb’s protégé, on the board,” according to the letter. 

Islam, managing partner at LTS One which counts 3G Capital’s co-founders as backers, had worked at Third Point for 17 years, his LinkedIn profile shows.  

A representative for Third Point declined to comment on the company’s letter.

Bath & Body Works said Brady’s experience was “highly complementary” to the skills and experience of the existing directors, and her appointment reflects Third Point’s own shareholder input.

Islam, though, hadn’t served as an executive of a public retail or consumer company, according to Bath & Body Works. The company also raised questions about his ability to function as a board member independently of Third Point.  

Third Point said in a letter last week, without naming Islam, that it had proposed a shareholder with “impeccable credentials” as a second candidate that the company rebuffed within a week of accepting Brady. The letter, declaring a proxy fight, also alleged that Bath & Body Works failed to recognize Third Point’s role in proposing Brady. 

That letter followed a Bath & Body Works announcement that it had appointed Steve Voskuil, chief financial officer at Hershey Co., to the board. 

“While we recognize Mr. Voskuil’s financial experience, this board’s handpicked new director does not assuage our concerns about substantial corporate governance shortcomings,” Loeb said in his letter. Loeb also criticized what he called “the eye-popping sum of nearly $18 million” in compensation given to executive chair and former interim Chief Executive Officer Sarah Nash.

Bath & Body Works, based in Columbus, Ohio, became a standalone business after L Brands Inc. spun out lingerie chain Victoria’s Secret & Co. in 2021. The company’s shares have fallen 24% in the past year.

©2023 Bloomberg L.P.

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