A shakeup has hit the board of directors at A. Schulman Inc., as angry shareholder Ramius Capital Group LLC has won election for two of its candidates to the board.
Results of board voting were announced Jan. 10 at the compounding firm's annual meeting in Fairlawn. Plastics industry veterans Lee Meyer and Michael Caporale Jr. now are members of the board. Details of the vote were unavailable at deadline, but are expected to be finalized before the end of the month.
New York-based Ramius - which owns more than 7 percent of Schulman - had criticized Schulman and Schulman's management for underperformance in recent years, saying the firm hadn't done enough to improve the company and its value to shareholders.
Meyer, 58, had a lengthy career with plastic building products firms Ply Gem Industries Inc., Variform Inc. and GE Plastics. Caporale, 56, held management positions with Ply Gem and with building products maker Associated Materials Inc. They will assume spots held by longtime board members Joseph Gingo Jr. and James Karman.
Gingo was named Schulman's chief executive officer on Jan. 1, replacing Terry Haines, who is retiring after a 42-year career with the firm.
In a Jan. 10 news release, Gingo said he looks forward to ``working with all directors to transform the company's operations to increase shareholder value.'' He did not address shareholders at the annual meeting.
Ramius also had proposed the creation of a special committee to explore options for Schulman, including potential sales or joint ventures involving either the entire company or its North American business unit. Results of voting on this proposal also were unavailable at press time.
The event marks the third time in the last three years that Schulman has come under fire from unhappy shareholders. In 2005 and 2006, the firm battled New York-based Barington Capital Group LP, which remains a major Schulman shareholder. In both of those cases, Barington dropped their proxy fights when Schulman agreed to add Barington representation to the board.
At the annual meeting, Ramius partner Mark Mitchell said Schulman is undervalued.
``Unfortunately, the company has had poor financial performance and has faced hostile proxy fights the last three years,'' he said.
Gingo has proposed a 100-day action plan to transform the company. When asked about the plan after the meeting, Mitchell said that Schulman management ``has said things like this before.''
``We would've hoped that the company would have included in the 100-day plan, some metrics we could track,'' he added.
Haines made only brief comments in his final public appearance as Schulman CEO, thanking the board and shareholders for working with him over the years.
For fiscal 2007, ended Aug. 31, Schulman's sales were up nearly 11 percent to almost $1.8 billion. But profit plunged almost 31 percent to $22.6 million. Operations outside North America - mostly in Europe - accounted for almost 75 percent of Schulman's sales. The North American unit has struggled in recent years, partly because of a soft automotive market, which is one of its largest end segments.
Schulman is off to a good start in fiscal 2008. Sales for its first quarter - ended Nov. 30 - were up 12 percent to almost $497 million vs. the year-ago period. First-quarter profit also jumped from $2.3 million to $10 million in the same comparison.
Schulman ranks as one of North America's largest compounders, with a market share estimated at between 2-3 percent.