Activist investor Starboard LP moved to take over the board of Corteva (CTVA) - Get Report and replace the seed and pesticides company's chief executive, James Collins, citing "a litany of missed promises and unforced errors."
"Since our initial investment over eighteen months ago," Starboard managing member Jeffrey Smith said in a letter to board Chair Gregory Page, "we have watched with increasing dismay as management continues to take credit for achieving ever-increasing synergy milestones without consequent improvement in profitability."
Corteva did not immediately respond to a request for comment.
Shares of the Wilmington, Del., company at last check were up 1.9% to $44.50. The stock on Jan. 13 touched a 52-week high near $45 and it has doubled off its 52-week low of $20.38, set in mid-March.
The letter said "a litany of missed promises and unforced errors have furthered our conviction that current leadership is ill-equipped to maximize the value of Corteva’s assets"
"In particular, we have had significant difficulty reconciling the Board’s affinity for Jim Collins with his public track record in leadership positions," Smith said.
"As evidenced by his annual incentive compensation relative to target, we believe his performance while leading Corteva can be characterized as incredibly disappointing."
Smith said Starboard, which owns about 1.6% of Corteva, has become increasingly worried that the board's aversion to leadership change "is symptomatic of a broader preference for comfort and status quo."
"Simply stated, if Corteva were looking to hire a new CEO and Jim was proposed as a candidate, based on his track record, we would not interview him," the letter said. "We do not believe the Board would either."
Starboard nominated eight director candidates for the company's 12-member board for election at Corteva's annual meeting.
The list includes Jacques Croisetiere, former chief financial officer at Bacardi, and Lisa Crutchfield, managing principal at Hudson Strategic Advisers.
In November, the board backed Collins after Starboard reportedly complained about the company's performance, Reuters reported.
Corteva became a publicly traded company in 2019 after it was spun out of DowDuPont.