ISS backs three of four dissident director candidates in Air Products fight

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By Svea Herbst-Bayliss

NEW YORK (Reuters) -Proxy advisory firm Institutional Shareholder Services on Monday recommended that Air Products and Chemicals investors elect three of activist investor Mantle Ridge’s four director candidates to the company’s nine-member board.

The recommendation comes days after another proxy advisory firm, Glass Lewis, said investors should elect all four of the dissident’s nominees at the January 23 annual meeting.

ISS backed Mantle Ridge’s founder Paul Hilal, Dennis Reilley and Andrew Evans. The report also urged investors to withhold their votes from CEO Seifi Ghasemi, lead director Edward Monser, and Charles Cogut.

Mantle Ridge argues the industrial gases company needs to lay out a succession plan for its octogenarian CEO, who has served at the helm for a decade, allocate its capital differently and scale back on risky projects.

ISS expressed concerns with the board’s oversight of the company’s strategy and succession planning for octogenarian CEO Ghasemi. “A reconstituted board would need to focus on de-risking the existing project commitments, evaluating underperformance, rebuilding credibility with investors, and developing and executing an effective succession plan,” ISS wrote, adding that Mantle Ridge’s “slate includes candidates that have skills and experience to help the board address these issues.”

Many investors rely on recommendations from proxy advisory firms to cast votes in elections that decide hot-button issues including who serves on a board.

(Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama)