- SpartanNash is pushing back on an attempt by an activist investor group to reshape its board of directors, arguing that the investors are basing their effort to change the grocer's corporate governance on outdated information and "outright ignoring" the grocer's financial performance since 2019.
- The investors — led by Macellum Advisors and Ancora Holdings Group — said in a letter to shareholders released Friday that they want to replace SpartanNash Chairman Douglas Hacker and two other members of the grocer's board with a slate of three directors they have nominated.
- SpartanNash is facing public shareholder pressure to shake up its board following its appointment over the past two years of multiple new executives and board members.
SpartanNash and the activist investors it is in conflict with are presenting opposing views of the supermarket operator's performance and actions in recent years, with each side casting the other as lacking the ability to guide the company's future direction.
In a press release issued Friday in response to the letter from Macellum and Ancora, SpartanNash said it has seen a total shareholder return of 88% since Tony Sarsam became CEO in September 2020 and 251% since former CEO Dave Staples resigned in August of the previous year.
The company, which owns more than 145 supermarkets in nine states under banners including D&W Fresh Market, Forest Hills Foods, SunMart and Martin's Super Markets, said it has taken "decisive action" to overhaul its leadership that includes naming seven new top-level executives and delivering on a strategy that enabled it to meet its financial objectives in 2021 and has positioned it for continued growth this year.
"We are proud of what our entire organization accomplished during a pandemic and all that has been achieved while simultaneously reengineering the business from top to bottom," the company said in a statement.
Macellum and Ancora, however, said SpartanNash has had "constant chaos in the C-suite" in recent years and "still seems to lack any clear strategy for value creation," pointing out that the grocery company's stock price is lower now than it was five years ago. The investors together own about 4.5% of SpartanNash's outstanding shares, according to the letter.
"We contend the Board has consistently demonstrated disappointing decision-making and poor judgment while presiding over many initiatives that have resulted in the destruction of shareholder capital and significant dilution," Jonathan Duskin, managing partner of Macellum Capital Management and Fredrick DiSanto, CEO and executive chairman of Ancora, wrote in their letter to SpartanNash's shareholders.
The investors, who are looking to dislodge SpartanNash directors Shan Atkins and William Voss in addition to Hacker, said the company's current leadership is "wed to a flawed corporate structure and has failed to implement basic operating initiatives." Macellum and Ancora have proposed adding Duskin to the grocer's board along with John Fleming, a former grocery-focused executive at Walmart and Michael Lewis, former president of retail for OfficeMax.
SpartanNash said Macellum began having meetings with its management team in late 2021 and acknowledged at that time that it had only a "limited understanding" of the grocery industry and the company's business. The grocer added that Macellum did not offer "specific views" on its business until a meeting on March 1 and then came back with "unreasonable demands" two days later.
The shareholders will vote on the composition of the board at the company's 2022 annual meeting, which hasn't yet been scheduled.