Marathon Partners announces its reasons for launching a proxy fight with elf Beauty
Leveraging its 5.2% stake in the company, activist investor Marathon Partners has opened a proxy contest with Beauty Elf, Inc. (NYSE: ELF), attempting to sit three new directors on its board of directors. The stock management company today issued a press release setting out its case for shareholders, proclaiming that “the elf’s lack of discipline in managing overhead has deprived shareholders of profit growth and, by therefore, returns on investment “.
Marathon claims that elf’s total return between its IPO on September 21, 2016 and May 26, 2020 is a loss of 1.9%. It compares the performance of the company to that of the S&P 500, which provided a return of 48.9% over the same period, and the average return of the “elven peers” Shiseido, L’Oreal, Estee Lauder, Revlon, and Coty, which she said generated a total return of 36.2%.
One of the partners of activist investor and candidate for board election, Mario Cibelli, said of elf: “We continue to be frustrated with directors’ willingness to tolerate underperformance. obvious, while richly rewarding the management team despite the lack of growth in earnings and returns for shareholders. He added that new directors, if elected, will strive to institute “cost discipline, operational efficiency, improved executive incentive programs” in the future.
Marathon could have investor sentiment on its side. Returning May 4-5, when an SEC filing increased the company’s stake in Beauty Elf public, the elf share price rose from $ 12.47 on May 4 to $ 13.07 when the market opened the next day, an increase of + 4.8%.
The election will take place in three months, almost to the day, on August 27 at elf’s annual meeting of shareholders. The three Marathon candidates are Dhiren Fonseca, Mario Cibelli and Beth Birnbaum.
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