NEW YORK/CHICAGO (Reuters) - Third Point LLC warned Campbell Soup Co’s (CPB.N) board on Wednesday against picking a new chief executive before next month’s annual meeting, where the hedge fund wants to oust all current directors.
Campbell reiterated last week that it is searching for a full-time replacement for former Chief Executive Denise Morrison, who left abruptly in May, and said on Wednesday that it expects to complete its search by year end.
Third Point said in a letter sent to Campbell’s board seen by Reuters that it is not appropriate to search for a new chief executive during a proxy contest when shareholders will be asked to vote on a new board at the meeting on Nov. 29.
“We think it is entirely uncontroversial to insist that the next permanent CEO be selected by the newly elected Board,” Third Point wrote. Third Point asked Campbell to defer any decision about a new CEO until after the upcoming annual meeting.
Campbell responded by saying that it will pick its next chief when it finds the best candidate. “It has always been the board’s intention to select the company’s next CEO upon finding the best candidate, which we expect to do by the end of the calendar year,” the company said in a statement. Search firms have helped the company review candidates for months.
CNBC first reported that Third Point wrote to the board.
The New York-based hedge fund is stepping up pressure on Campbell as it tries to line up support from other shareholders for its slate of 12 directors. Third Point, which owns nearly 7 percent of the company, has criticized the board for making poor decisions that pushed the stock price lower over years.
Campbell’s stock traded at $32.22 on Wednesday, off 17.56 percent since the start of the year.
Campbell has said its board, including several heirs of the man who ran the company a century ago, is best placed to pursue the best strategies for the company and shareholders.
Reuters reported last month that Campbell is drawing up a list of CEO candidates, with Chief Operating Officer Luca Mignini emerging as the top internal contender.
With the annual meeting approaching, Third Point said Campbell would have a tough time recruiting top external candidates who might not serve a long time if new members join the board.
Third Point has previously criticized the company for failing to have a plan in place for when a CEO leaves.
Reporting by Svea Herbst-Bayliss with additional reporting Richa Naidu in Chicago; editing by Diane Craft and Jonathan Oatis