Specialty reinsurer Argo Group International Holdings has announced a new cooperation agreement with its shareholder, Voce Capital Management, that will see several changes made to the composition of Argo’s Board of Directors.
The agreement marks the culmination of an ongoing dispute that began back in February 2019 when Voce accused Argo CEO Mark E. Watson III of perpetuating “shockingly high and shockingly inappropriate” corporate expenses.
Watson later departed the company, following news that Argo had been subpoenaed by The US Securities and Exchange Commission over compensation practices for its executives.
And now, it appears that Argo has capitulated to at least some of the Board nominees originally put forward by Voce in March 2019, having only recently criticised the proposal last month.
For example, as part of the new agreement, Carol McFate, former Chief Investment Officer at Xerox, will join Argo’s Board of Directors, filling the seat previously held by Watson.
McFate, who oversaw $12 billion in retirement investment assets at Xerox between 2006 and 2017, was among the five nominees originally put forward by Voce.
Prior to Xerox, she served as Executive Vice President & Global Treasurer for XL Global Services, a subsidiary of XL Capital, and also held various senior executive positions with AIG and The Prudential Insurance Company of America.
The cooperation agreement will also allow Voce to work with Argo’s Nominating and Corporate Governance Committee to identify and evaluate two new independent director candidates to stand for election at Argo’s 2020 Annual General Meeting of Shareholders.
One of those two new director candidates will be selected from the slate of individuals nominated by Voce for election at the requisitioned special general meeting of Argo’s shareholders.
In return for these concessions, Voce has agreed to withdraw its call to seek further board changes.
“We are pleased to have reached a constructive agreement with Voce and value their input as we continue to enhance our Board composition and governance practices,” said Thomas A. Bradley, Chair of the Nominating and Corporate Governance Committee.
“We are pleased to welcome Carol to the Board,” he added. “Her strong leadership and executive experience in the insurance and investment management industries will help drive continued value creation for our shareholders.”
J. Daniel Plants, Founder and Chief Investment Officer of Voce, also commented: “We made a substantial investment in Argo because we believe it has significant untapped value that can be realized.”
“The appointment of Carol McFate to the Board, the addition of two other independent directors selected with Voce’s input, and the Company’s ongoing governance improvements, are substantive and positive developments that give us confidence in the new course that Argo has charted,” Plants continued.
“We look forward to working with Argo’s Board and management in the shared pursuit of creating value for all shareholders.”
