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Business

Dan Loeb vexed at ex-Campbell CEO’s ‘enormous cash, perks’

By
Carleton English and
Josh Kosman
Published Oct. 1, 2018
Updated Dec. 21, 2018, 11:13 a.m. ET

Campbell Soup lavished its former chief executive with “enormous cash and perks” while the struggling company’s business and stock price languished, according to fresh accusations from activist investor Dan Loeb.

Ex-CEO Denise Morrison, who stepped down in May, collected more than $60 million total compensation during her seven-year tenure ending in June 2018, according to a letter sent by Loeb to shareholders that was disclosed Monday.

Morrison likewise enjoyed lavish travel perks — for example, flying to Davos, Switzerland, in January to gab on CNBC about the future of the food business with Elon Musk’s brother Kimbal Musk, according to Loeb.

“In the midst of the company’s crisis, the board authorized [Morrison] to hobnob in Davos at the World Economic Forum with the global elite — at shareholders’ expense — rather than stay home and run the ailing company,” Loeb griped in the letter.

Loeb’s hedge fund Third Point, waging a battle to overhaul the soupmaker’s board of directors, released a slew of materials for shareholders over the last few days to entice them to vote for his nominees.

Loeb has been pushing Campbell to put itself up for sale and called the past year at Campbell “particularly disastrous” in 45-page investor presentation released Monday.

He was disappointed when the company “failed to take bold action” after conducting a three-month review, deciding only to divest its fresh food and global snacks businesses.

Campbell defended its commitment to the plan it announced following its three-month strategic review but noted it was open to reviewing other plans.

“The board is confident that this plan is the best path forward for Campbell at this time,” Campbell said in a statement Monday.

“Importantly, the Board remains committed to evaluating all strategic options to enhance value in the future,” it added.

Campbell could command $58 a share in a take-private deal, representing a 58 percent premium on its current stock price, Loeb said.

Over the last few years, Campbell missed the mark on consumers’ move toward healthier foods and “completely botched” its acquisitions in the space, paying too much for Pacific Foods in 2017, Third Point said.

And even Campbell’s attempts to invest in new areas now seem misguided.

“Campbell also blew shareholder money on speculative investments in businesses like (now defunct) Juicero,” Third Point said.

While investors in Campbell’s rival Hormel saw their money grow 16 times over the last 20 years, a $1 investment in Campbell yielded only 34 cents over the same period, Loeb wrote in a shareholder letter dated Sept. 28.

Third Point, whose previous targets have included Yahoo and Sotheby’s, built a 5.7 percent stake in Campbell over the summer — weeks after the company reported disastrous earnings and the sudden exit of Morrison.