Summary
Cardinal Health, Inc. (CAH) announced a significant governance development with the entry into a Cooperation Agreement with activist investor Elliott Associates, L.P. This agreement involves the immediate appointment of four new independent directors to the Board, including Elliott's Global Head of Engagement, Steven K. Barg, who will also serve on a newly formed Business Review Committee alongside the Company's CEO. This committee will advise the full Board on matters related to the agreement. Furthermore, two existing directors, Dean A. Scarborough and John H. Weiland, will not stand for re-election at the upcoming 2022 Annual Meeting, resulting in a reduced Board size. The company emphasized that these departures are not due to disagreements. The Cooperation Agreement outlines specific terms, including standstill provisions for Elliott and a commitment to nominate the new directors at the next annual meeting, subject to certain conditions related to Elliott's ownership stake. This move signals a collaborative approach to enhancing shareholder value and strengthening board oversight.
Key Highlights
- 1Cardinal Health entered into a Cooperation Agreement with Elliott Associates, L.P.
- 2Four new independent directors, including an Elliott nominee, appointed to the Board effective September 6, 2022.
- 3A new Business Review Committee has been established, including the CEO and an Elliott nominee, to advise the Board.
- 4Two existing directors, Dean A. Scarborough and John H. Weiland, will not seek re-election at the 2022 Annual Meeting.
- 5The Board size will be reduced to 13 directors following the 2022 Annual Meeting.
- 6The agreement includes standstill and voting commitments from Elliott.
- 7The new directors will be nominated for election at the 2022 Annual Meeting, with the agreement contingent on Elliott maintaining a certain ownership stake.