Argo may move to appease disgruntled shareholder, but defends current path

Bermuda-based re/insurer  Argo Group International Holdings is ready to engage with rebellious minority shareholders ahead of a potential proxy war, but remains defiant of accusations of underperformance and drift.

"We remain confident in the Company’s strategy for continued growth and will continue to execute our strategic plan and evaluate opportunities to enhance shareholder value," Argo management said in response to shareholder agitation for new leadership.

Comments follow word that minority shareholders led by Capital Returns Master are seeking to place two independent members to the Argo board of directors, shake up executive compensation and name the next auditor.

Capital Returns Master cited "poor financial and longstanding stock price underperformance under the oversight of the current Board" in launching its proxy bid. The group named industry veterans Ronald Bobman and David Michelson as its candidates to bolster the board line-up.

Argo management claims to have "engaged with Capital Returns numerous times to better understand its perspectives" and will review the two candidacies before putting up its proposed slate.

But the bulk of the Argo statement is rather a defence of the group’s repositioning to-date.

Argo's current leadership has "made significant progress to strengthen the Company" with a strategic repositioning started in 2020 towards earned premium growth, reduced volatility and expanded margins now likely "to deliver sustainable and profitable growth to drive shareholder value."

Likewise, the current management team can boast of "a highly qualified, experienced and refreshed" team with eight of nine directors with independent status, Argo said.

In its proxy filing, Capital Returns Master said it will also be voting against management proposals for executive compensation and to appoint EY as independent auditor for the coming year.

Argo has yet to set a date or agenda for its 2022 annual meeting.

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