BOSTON (Reuters) - Corteva Inc's CTVA.N board of directors decided to back chief executive officer James Collins after activist investor Starboard Value LP took issue with the performance of the agricultural products company's management, people familiar with the matter said on Thursday.
Corteva, valued at $27 billion, became a publicly traded company last year after it was spun out of chemical giant DowDuPont DD.N. Starboard, which owns 11.7 million shares or 1.6% of Corteva, has said that the company has not lived up to its potential and is lagging behind its peers.
Corteva’s board discussed Collins’ future at a recent meeting and is fully supportive of him and management, the sources said, requesting anonymity because the matter is confidential.
A representative for Corteva declined to comment and Starboard did not return a call seeking comment.
Starboard CEO Jeffrey Smith has criticized Corteva’s financial performance, noting that its cash flow margin of 14.4% lags behind peers, and that its share price, now at $36.96, could be closer to $55. The company’s shares have climbed 44% in the last 52 weeks compared with a 14.35% in the S&P 500 Index.
Collins, who had previously been chief operating officer for the Agriculture Division of DowDuPont, was asked about performance on a quarterly earnings call earlier this month.
“We agree there is tremendous (cash flow) margin potential in this business. I don’t have to go out and invent that future. It’s sitting here right now. What we have to do is execute it,” Collins said.
Investors will soon have a chance to nominate directors at Corteva.
Starboard is known for its operational know-how and often proposes to add new directors to a company’s board. It won 17 board seats at four companies in the first half of 2020.
Reporting by Svea Herbst-Bayliss in Boston; Editing by Stephen Coates
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