PHILADELPHIA–(BUSINESS WIRE)–Ann Fandozzi, former Chief Executive Officer and a director and shareholder of RB Global, Inc. (“RB Global”), today released the below.
Dear Fellow Shareholders,
I write to you today for two purposes:
- To thank you for your openness, feedback and tremendous partnership during my three-and-a-half years as Chief Executive Officer of our company.
- To provide important facts about the proposed long-term incentive program for senior management and my departure from the Chief Executive Officer role.
I. Thanking you for your partnership.
The creation of long-term shareholder value has always been my “true north,” effectively guiding all of my actions and decisions as your Chief Executive Officer. This is why I placed significant emphasis on engagement and interaction with you. Ultimately, you allowed me to earn your trust and provided my colleagues and I with the runway needed to create what is now an unmatched global marketplace. Our partnership positioned RB Global to navigate an unprecedented period of transformation and produce shareholder returns of approximately 62%, as well as outperformance compared to the market and industrials sector.1 The company’s success was also broadly recognized when The Globe and Mail named me “CEO of the Year in Innovation” in 2022.
II. Correcting the record for our collective benefit.
I want to clear up any confusion relating to my efforts to establish a long-term compensation program for senior managers. After working with qualified third-party advisors and engaging with the Board’s Compensation Committee, a long-term incentive program was formulated to align senior management’s at-risk compensation with long-term shareholder value.
Since many of you have attempted to contact me and seem interested in obtaining clarity, I have laid out the facts in a concrete manner here:
Fact -The proposed program was five years in duration and comprised entirely of performance-based stock and options.
Fact -The proposed program provided for entirely back-loaded vesting in years three through five.
Fact – Participating members of senior management – including myself – would not have obtained any long-term incentive compensation if they left before three additional years of service.
Fact -The performance-based stock and options granted upon program approval would have vested over five years as milestones were hit.
Fact – Participating members of senior management – including myself – would not have received any other long-term incentive compensation during that five-year time period.
Fact – I never sought or demanded a $65 million upfront payment or forward vesting grant for myself.
Fact – I repeatedly asked the Board members who took over negotiations – Erik Olsson and Jeff Smith of Starboard – to solicit appropriate shareholder feedback on the tenets of the proposed program. To my knowledge, this request was refused.
Fact -The Company’s Shareholder Engagement Policy states that “compensation philosophy and structure” are suitable topics and not problematic from a Regulation Fair Disclosure, or Reg FD, perspective.
This type of long-term, at-risk program was critical to ensure senior management remained intact to oversee the entire integration, deliver critical commitments to shareholders and fulfill our obligations to customers, who we have asked to enter into long-term partnerships. Despite my willingness to continue good faith negotiations, my resignation was abruptly sought and a press release was issued to announce a successor. And despite what the company has stated publicly, I did not resign from the Chief Executive Officer role.
Without prejudice to my position articulated above, I am open to reaching an equitable separation arrangement with the company. The last thing any of us want is a prolonged distraction. I want the very best for RB Global’s talented employees, loyal customers and world-class shareholders.
At this time, Ms. Fandozzi is not in a position to make additional statements or engage beyond this letter.
1 Total shareholder returns (reflecting dividends reinvested) were sourced from FactSet Research Systems Inc. and cover RB Global, the S&P 500 Index and the S&P Industrials Index.
Sloane & Company
Whit Clay, 212.446.1864