Ditch Voce proxy ballot cards, urges Argo ahead of 2019 AGM

Argo has urged its shareholders to ignore voting cards and information they may have received from activist investor Voce Capital Management that could be used to vote out board members and replace them with Voce nominees.

The company called on shareholders to only use its white proxy card for votes “to end Voce Capital’s destructive and distracting campaign” in the battle for boardroom seats ahead of its annual general meeting on 24 May 2019.

In an SEC filing submitted today (Friday 12 April), Argo said Voce had notified them it was nominating Charles Dangelo as a director in opposition to nominees proposed by Argo’s existing board. The company outlined further Voce plans to remove members of the current board and replace them with Voce nominees.

In response, Argo told shareholders: “You may receive solicitation materials from Voce, including proxy statements and blue proxy cards. We are not responsible for the accuracy of any information provided by or relating to Voce or its nominees.

“The board does not endorse any Voce nominee and unanimously recommends that you vote against the election of each Voce nominee and against each of the Voce proposals.”

The Argo board also “strongly urged” shareholders “not to sign or return any blue proxy card sent to you by Voce”, adding that any submitted a blue proxy card sent to you by Voce can be revoked and an alternative vote submitted.

Argo wrote directly to shareholders to highlight its position and enclosed an alternative white proxy ballot to vote for the existing board’s nominees. In the SEC filing, it emphasised that previously submitted Voce-related votes could be voided “by signing, dating and returning the enclosed white proxy card in the postage-paid envelope provided to you or by using the telephone or Internet method of voting as shown on the white proxy card”.

In the letter to shareholders, Argo said Voce had accumulated a position in the company over the past few months and “launched a proxy contest against Argo to push its short-term agenda”.

It said: “Similar to other activist campaigns initiated by Voce, the firm’s principal, J. Daniel Plants, has put forward a series of poorly researched claims with little regard for the truth.”

Rebutting what it called Voce’s “countless false and misleading statements” Argo gave a comprehensive point by point response.

Contrary to Voce’s “express misstatements” to shareholders, Argo said “did not build, nor have we ever had, a penthouse apartment above our New York offices”.

The relocation of its New York City office has led to lower rent costs, while “the cost per square foot cited by Voce is incorrect”. The consolidation of offices following the Ariel acquisition also brought greater cost efficiencies.

Argo denied it had purchased expensive artworks or maintained lavish art collections, stating that most of the artwork in its offices “has been acquired in the communities where our employees live and work to showcase the talent of local artists”.

The cost of every piece of artwork carried on the firm’s balance sheet for all offices worldwide over the past two decades is less than a million dollars, it said, adding “hardly a sum worthy of public debate”.

On the topic of sponsorship decisions, Argo said they were made to be “cost-effective” and the company has spent on average less than a million dollars a year over the past five years for named sponsorships. “The revenue we generate from sponsorship opportunities meaningfully exceeds our costs and allows us to deepen our relationships with key clients.”

Defending its corporate aircraft programme, Argo said: “Like most other companies with offices spread across wide distances, we use corporate aircraft to facilitate business travel for our executives and other team members.

“Corporate aviation makes it possible for senior executives to perform their duties in more than one location during a particular work day or work week, permitting them to work during travel and allowing them to be face-to-face with clients, service providers and internal teams across multiple time zones and geographies.”

It admitted that its executives “do, on occasion, use corporate aircraft for personal trips but said they “do so at their own expense”.

It added: “Contrary to Voce Capital’s uninformed claims, the company did not use corporate aircraft to transport our CEO to all of the destinations described by Mr Plants in Voce’s initial press release. The aircraft in question was actually used by third parties unrelated to Argo at various times during the periods referenced in Voce’s press release.”

Finally, Argo said it had made “made numerous” efforts to constructively engage with Voce Capital, which had been rejected.

Voce was contacted for comment but had not responded at the time of publication.