#United States #New York #Air Products #Seifi Ghasemi #Mantle Ridge

Urgent Call for Change at Air Products and Chemicals, Inc.

In a comprehensive presentation, Mantle Ridge LP, a key investor in Air Products and Chemicals, Inc. (APD), has laid bare the pressing need for organizational reforms within the company. With a stake amounting to approximately $1.3 billion, Mantle Ridge is calling attention to years of operational deficiencies, misguided capital allocation, and failures in project execution and succession planning. Notably, the current dynamics under Chairman and CEO Seifi Ghasemi have raised concerns regarding governance and strategic direction.

The Need for Change

Mantle Ridge emphasizes that the Air Products Board has broadly failed in its responsibilities, including oversight of the CEO and succession planning. Ghasemi’s significant tenure, marked by an apparent lack of credible succession planning, has fostered an entrenched leadership structure that diminishes governance and responsiveness. His declarations to remain in control underscore an unwillingness to transition power, posing critical questions about the company’s future.

Specifically, Ghasemi's statements, such as, "As long as I'm vertical, I'm going to be Chairman of Air Products," indicate a troubling commitment to perpetuate his directorship without considering optimal governance practices or shareholder interests.

Financial Performance Under Scrutiny

Mantle Ridge's analysis illuminates Air Products’ troubling financial trajectory, revealing that its total shareholder return (TSR) has underperformed competitors and the broader market. The past five years have seen Air Products yield a meager +50% TSR, in stark contrast to the +171% and +93% returns from Linde and Air Liquide, respectively. Such indicators reflect profound dissatisfaction among shareholders regarding the management's performance and strategic decisions.

The management team's lack of focus on core strengths, paired with Ghasemi's inclination for ambitious, risk-laden projects, has not only diluted stock value but also resulted in subpar returns on invested capital. Investors have voiced concerns about Ghasemi's high-risk initiatives, which have seemingly consumed resources better allocated to optimizing Air Products’ established core operations.

The Path Forward

Given the stagnation and downward trajectory, Mantle Ridge proposes a radical reconstitution of the Board, advocating for the election of its four independent nominees—Andrew Evans, Paul Hilal, Tracy McKibben, and Dennis Reilley—who collectively possess extensive experience in the industrial gas sector and vital strategic insight. The proposed leadership team brings expertise in capital allocation and energy transitions, crucial for aligning future objectives with shareholder interests.

Under this restructured Board, Mantle Ridge forecasts that Air Products could see its share price exceed $425, significantly increasing shareholder value in the process. The nominees are encouraged to initiate genuine CEO succession planning, management development, and align executive compensation directly with performance outcomes.

Conclusion

As the company prepares for the upcoming 2025 Annual Meeting of Shareholders, Mantle Ridge urges stakeholders to actively engage in shaping Air Products’ future by voting for the proposed independent nominees via the BLUE proxy card. By doing so, investors can help drive essential changes that have the potential to revitalize Air Products, restore its operational efficiency, and secure a promising long-term outlook. For additional insights and information, shareholders are invited to review the complete presentation at www.RefreshingAirProducts.com.

In conclusion, the time is ripe for transformative change at Air Products and Chemicals, Inc. Transitioning to a rejuvenated leadership focused on long-term value could indeed steer the firm back on a promising growth path.