Newell CEO Spars With Investor: I Don’t Use a Driver, I Drive Myself
desires to make one factor clear: He isn’t a CEO who will get chauffeured.
Earlier than launching right into a point-by-point refutation of criticisms levied by activist buyers in opposition to the maker of Sharpie markers and Elmer’s glue, Mr. Polk hit again in opposition to the buyers’ assertion executives waste cash through the use of employed drivers.
“No, I don’t use a driver,” he stated in a name Friday morning with analysts to assessment the corporate’s newest quarterly outcomes. “I drive myself to work daily, identical as I did daily for 5 years I labored in Atlanta, identical as my dad did for 38 years on the firm he labored for, identical as I might anticipate my youngsters to do for the remainder of their lives.”
Mr. Polk went on to notice he stops by his native
each morning and, by 6:20 a.m., is caught in Lincoln Tunnel site visitors en path to Newell headquarters in Hoboken, N.J.
The feedback got here as a part of Mr. Polk’s response to a 172-slide presentation launched Tuesday by activist fund Starboard Administration LP. Starboard not too long ago agreed to name off a proxy battle with Newell in trade for with the ability to identify three administrators to the board.
The activist accused Newell of wasteful spending, operating scattered and inefficient operations and fighting a bloated company tradition that slows resolution making.
Mr. Polk denied a number of Starboard claims. “No, we don’t have 5 planes, we now have two,” he stated. He additionally stated Newell doesn’t overspend on human-resources and authorized prices, it doesn’t have 5 separate headquarters and its e-commerce crew doesn’t have the liberty to set pricing with out enter from different enterprise models.
The dynamic with Starboard is uncommon in that it places the veteran chief government in public disagreement with a contingent of the corporate’s board. Newell has revamped its board, agreeing to switch 9 of 12 administrators.
“Are we now at a detente?,” SunTrust analyst Invoice Chappell requested on the decision.
Starboard, which earlier this 12 months had known as for Mr. Polk’s ouster, wasn’t instantly out there for remark.
Mr. Polk stated he was open to buyers’ ideas for enhancing the enterprise. “I simply needed to right the report.”
Within the two years since Newell closed its $15 billion megadeal to purchase Jarden Corp., the corporate has repeatedly missed gross sales objectives and misplaced billions of of market worth. Now, it’s seeking to dump a number of of the companies that have been acquired, together with Rawlings baseball gloves and Goody hair ties.
On Friday, Newell stated it deliberate to dump much more of the companies, together with Josten’s class rings and Pure Fishing, which each got here from Jarden. Mr. Polk stated the expanded restructuring plan would shed two thirds of Newell’s factories and about half of its workforce.
Mr. Polk’s feedback got here as the corporate introduced it discovered a purchaser for its packaging enterprise and laid out monetary outcomes for the quarter ended March 30.
Newell agreed to promote Waddington Group, which makes disposable dinnerware and meals containers for delis and eating places, to Novolex Holdings LLC for about $2.three billion. Novolex makes paper and plastic packaging and is backed by private-equity agency
The companies it now desires to promote contribute about 35% of its internet gross sales. The corporate expects the gross sales to lift about $10 billion, about half of which is able to go towards repurchasing shares.
Newell stated the companies it plans to maintain generate about $9.5 billion in annual gross sales and are evenly break up between legacy Jarden manufacturers and legacy Newell Rubbermaid manufacturers.
The Waddington sale, which the corporate expects to shut inside about two months, is the primary divestiture for the reason that restructuring plan was introduced in January. Waddington’s internet gross sales in 2017 have been about $907 million.
Newell’s first-quarter gross sales dropped 7.6% to $three.02 billion, the corporate stated Friday, primarily attributing the decline to enterprise divestitures, disruption from Toys “R” Us Inc.’s chapter and decrease stock ranges of its writing merchandise. It posted internet earnings of $53.three million, down from $638.5 million a 12 months earlier.
Newell stated it expects its 2018 adjusted earnings per share to be on the low finish of its beforehand shared vary of $2.65 to $2.85.
Newell shares, which had fallen about 40% for the reason that Jarden deal closed two years in the past, rose 6% to $28.29 Friday morning.
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