The New Year has brought Richmond’s first C-suite shakeup.
Locally based armored car giant Brink’s announced Monday a change in leadership that will see the early retirement of CEO Thomas Schievelbein and the replacement of at least two members of its board.
The changes are part of an agreement between the company and shareholder Starboard Value LP, an investment firm that has grabbed a majority stake in the company over the course of the past year.
Starboard is a so-called activist investor, a firm that typically buys up large stakes and tries to force changes in companies deemed to be undervalued and underperforming.
Schievelbein’s retirement is effective the day of the company’s annual meeting of shareholders, which is typically held in May, or earlier if a successor is appointed.
The agreement also called for the immediate election of three new directors, including Peter Feld, a managing member and head of research of Starboard Value. Also elected were Ian Clough, managing director of the Europe division at TNT Express N.V., a Netherlands-based delivery services company; and George Stoeckert, a private investor and adviser and a former executive with Dun & Bradstreet.
They replace Murray Martin and Ronald Turner, who stepped down from the board to make way for the new members. The third spot on the board would likely be created from the departure of Schievelbein, who is also stepping down as chairman, though the announcement does not specify whether Schievelbein will step down entirely from the board. His current board term expires in 2018.
The announcement said a search for a new CEO would commence promptly, overseen by a committee to be chaired by Feld. The board will also elect a non-executive chairman from among its membership.
The shakeup is the latest local impact by Starboard Value, a New York-based firm that invests in publicly traded companies it deems undervalued. It has also owned stakes in MeadWestvaco, now WestRock, and in Media General, which it has urged to consider a buyout offer from Nexstar Broadcasting Group.
Starboard first acquired Brink’s stock in early spring of last year. Since then, it has become Brink’s largest shareholder, purchasing nearly 4 million shares in May to raise its stake in the company to 8.2 percent. It currently has a 12.3 percent stake of the company’s outstanding common stock.
In October, the firm delivered a letter to Schievelbein and the board contending that missteps by management had caused the company to lose value and lag behind competitors.
“We believe that significant opportunities exist to create value for shareholders based on actions within the control of management and the Board,” the letter states. “Unfortunately, despite announcing a number of strategy shifts, personnel changes, and restructurings over the past five years, Brink’s has not capitalized on those opportunities but has instead … repeatedly disappointed investors and underperformed its peers.”
Annual revenues for the company have decreased in recent years, according to the company’s SEC filings. Revenues totaled $3.56 billion in 2014, down from $3.77 billion in 2013 and representing a loss of $27.5 million. Previous years yielded profits above $162 million, with revenues hovering above $3.5 billion in 2012 and 2011 – up from $2.81 billion in 2010.
Schievelbein’s salary also took a hit in that time, dropping from $5.37 million in 2013 to $4.28 million in 2014.
Schievelbein has helmed Brink’s since late 2011, when he was appointed to replace previous CEO Michael Dan. He served as interim CEO until June 2012, when he was named permanent CEO after a company search.
He previously had worked as president of Northrop Grumman Newport News, a subsidiary of the global defense company. He currently serves as a director of Huntington Ingalls Industries and New York Life Insurance Co.
Monday’s announcement quoted Schievelbein as saying: “We are pleased to have reached this agreement with Starboard, our largest shareholder, and look forward to working constructively together as Brink’s moves forward.”
He went on to thank Martin and Turner for their service as directors, as well as the company’s employees.
The announcement also included comments from Feld, who said Starboard Value “is pleased to have reached a constructive agreement” with the company.
“Brink’s has a world-class brand, and we believe there is a significant opportunity to create value for the benefit of all shareholders,” he said.
The agreement, which would include a succession plan for Schievelbein, is to be filed with the SEC. It had not been filed by Monday evening.
Financial advisers for Brink’s were Evercore and Morgan Stanley, and Wachtell, Lipton, Rosen & Katz served as legal adviser. Olshan Frome Wolosky acted as legal adviser to Starboard.