Air Products' Board of Directors Addresses Mantle Ridge's Recent Moves and Shareholder Concerns

Air Products' Board of Directors Responds to Mantle Ridge's Shareholder Letter

On January 8, 2025, Air Products' Board of Directors released a statement addressing the recent shareholder letter from Mantle Ridge. This response highlights the Board's concerns over Mantle Ridge's proposed candidates for leadership positions within the company.

Mantle Ridge has signaled its intent to exert control over Air Products by proposing its own nominees for both the Chief Executive Officer (CEO) and Chairman roles. The Board has articulated clear reasons why this course of action poses a significant risk to the shareholders of Air Products, emphasizing that the nominees lack the necessary qualifications and recent experience to lead a modern industrial gases company.

Concerns Regarding Mantle Ridge's Nominees

One of the key nominees from Mantle Ridge is Dennis Reilley for the Chairman position. The Board points out that Reilley has been out of management for the past 18 years and would be stepping into a role that requires an understanding of an industry that has evolved substantially in this time. Reilley's previous experience, while notable, is seen as outdated in the context of recent developments in the industrial gases sector.

On the other hand, Eduardo Menezes has been suggested as the candidate for CEO. However, the Board notes that Menezes lacks experience running a public company and only had responsibilities for a single region during his past tenure at Linde. Furthermore, it was announced that he was passed over for the CEO position at Linde, raising serious questions about his qualifications for the role.

The Board highlighted a perceived lack of confidence from Mantle Ridge in Menezes, as the firm did not nominate him for a Board position, creating an implication that his success could only be achieved if paired with Reilley. This situation raises alarming flags for shareholders regarding the leadership abilities of the candidates put forth by Mantle Ridge.

Flawed Claims and Comparisons

Additionally, Mantle Ridge has made inflated claims surrounding the performance record of its nominees, particularly attributing successes at Linde to them. The Board refuted this by noting that both Reilley and Menezes left Linde at vastly different times and managed only portions of the company, rendering the connection tenuous at best.

In comparison to current Board members and their newly proposed candidates, Bhavesh V. (Bob) Patel and Alfred Stern are seen as superior candidates with substantial backgrounds leading large publicly listed industrial companies. The disparity in qualifications between Mantle Ridge's nominees and those on Air Products' current Board is evident, reinforcing the notion that the latter are better equipped to guide the company forward.

Ethical Concerns Surrounding Reilley

The Board's concerns extend beyond qualifications to ethical matters as well. Mantle Ridge has claimed it will uphold high ethical standards, yet Reilley has a questionable history involving leaks of confidential information during his time on other public company boards. This past behavior, which led to an insider trading scandal, raises serious doubts about his suitability for the Chairman role. Many investors may find this disqualifying when considering the integrity of leadership.

Conclusion and Call to Action

In closing, Air Products' Board of Directors urges shareholders to reject Mantle Ridge's proposals and support the nominations of Patel and Stern at the upcoming 2025 Annual Meeting. The current Board emphasizes that under their guidance and the leadership of CEO Seifi Ghasemi, the company has successfully increased its market value substantially, generating over $44 billion for shareholders. The Board stands firm in its belief that Mantle Ridge's nominees are unfit to lead and should not be elected.

Investors are encouraged to disregard any blue proxy cards from Mantle Ridge and vote in favor of Air Products' existing nominees, who represent the best path forward for the company’s future.