SpartanNash Pens Letter to Shareholders Ahead of Board Vote

With two activist investors seeking the replacement of three directors on SpartanNash’s board, the Grand Rapids, Mich.-based retailer and distributor mailed a letter dated April 28 to shareholders ahead of its 2022 Annual Meeting of Shareholders of June 9 urging them to vote for its slate of nominees.

Those nominees are board chair Douglas Hacker, Margaret Shan Atkins, Matthew Mannelly, Julien Mininberg, Jaymin Patel, Hawthorne Proctor, Pamela Puryear, Tony Sarsam and William Voss.

“Your board has taken decisive actions to implement a comprehensive transformation of the company, refresh your board’s composition and make significant executive leadership upgrades to drive improved financial performance—all of which are taking hold, delivering measurable results and driving shareholder value,” SpartanNash wrote in the letter.

Saying SpartanNash is "wed to a flawed corporate structure" and has left owned real estate "sitting idle on the balance sheet," activist investors Macellum Advisors and Ancora Holdings Group are seeking the replacement of Hacker, Atkins and Voss, and have submitted its own candidates: Jonathan Duskin, founder and CEO of Macellum Capital Management; John Fleming, who was previously CEO of Walmart.com as well as chief marketing officer and chief merchandising officer overseeing Walmart's grocery business; and Michael Lewis, another Walmart veteran.

In the April 28 letter, SpartanNash said the investor group is pursuing “a cookie-cutter playbook that seeks self-serving gains from financial engineering, and which we believe puts the company and your investment at significant risk. … Their focus on selling critical company assets or the whole company is short-term oriented and demonstrates a lack of interest in exploring options that could generate superior long-term value.”

SpartanNash embarked on a board "refreshment process" last summer with the help of an executive search firm. That process resulted in SpartanNash appointing Mininberg, Patel and Puryear in February. The board refreshment, SpartanNash said, was undertaken "to ensure the board continues to have the right combination of skills, experience and diversity to oversee value creation for shareholders."

“Your board has overseen and helped develop the successful strategy being executed by a new leadership team, which focuses on driving change through the company’s transformation, operating model and ‘people first’ culture. This work is enhancing profitable growth and enabling SpartanNash to generate superior returns for shareholders with ample runway ahead,” the company wrote in the letter.

Earlier this month, SpartanNash launched a website, SpartanNashTransformation.com, summarizing organizational changes and rebutting the activist investor board challenge.

“Today, we believe SpartanNash is better positioned for profitable growth than at any time in the past. The company’s transformation is demonstrably underway and it is clear that our strategy is working,” it wrote in the April 28 letter. “SpartanNash’s total shareholder return has been 251% since the board transitioned the management team in the summer of 2019 and 88% since September 2020 when Tony Sarsam was announced as CEO. The company has also significantly outperformed the S&P 500 over those same time periods.”