Tempur Sealy Mails Letter To Shareholders Underscoring Strengths Of Board Of Directors
We find it concerning that ISS has recommended in favor of an activist shareholder with no plan for value creation at a critical time in the execution of
Consequently,
The Tempur Sealy Board of Directors and management team are taking appropriate steps to further drive enhanced performance and profitable growth. The Board is composed of 11 highly engaged directors with extensive industry and operational experience, nine of which are independent, and all of whom are overseeing a clearly articulated strategy that is continuing to create value for all shareholders.
The full text of the letter to be mailed to shareholders is below:
TIME IS SHORT – THE TEMPUR SEALY ANNUAL MEETING IS
VOTE 'FOR' THE TEMPUR SEALY BOARD ON THE WHITE PROXY CARD TODAY
Dear Fellow Tempur Sealy Shareholder:
We, your Board of Directors, are active and engaged in driving
-- The Tempur Sealy Board Comprises a
-- Directors
-- Your Board is Highly Accountable and Committed to Delivering Value for Shareholders
Time is short. Your vote is important. We encourage shareholders to vote "FOR" ALL of
MCLANE AND MASTO'S PRIVATE EQUITY EXPERIENCE IS A VALUABLE DIFFERENTIATOR
The Tempur Sealy Board possesses unique perspectives from experiences at well-known and respected companies, private and public, including Cadbury Schweppes, Charles Schwab, Gillette, Heinz, and
Furthermore, as many of you know, the bedding industry has long been linked to private equity ("PE") investors and ownership. Indeed, today our primary competitor is owned by a PE firm, and our two largest customers both have significant PE ownership. As such, experience in and understanding of the PE industry remains pertinent and an important differentiator, which is why we are fortunate to have Chairman of the Board,
It is thanks to the experiences and relevant backgrounds of your engaged Board that
In all, your Board, with the management team, is overseeing a plan that is working – a carefully considered and deliberate plan that capitalizes on the enormous global potential of
VOTE "FOR" MCLANE, MASTO AND SARVARY TODAY
At this critical time in
Messrs. McLane, Masto and Sarvary are proven stewards of value creation for
Messrs. McLane and Masto have helped to guide the Company's development from a niche product innovator with limited distribution and market share to the world's largest bedding company. During their tenure as directors,
- Grown enterprise value from approximately
$350 million to approximately$5 billion ; and - Increased sales from approximately
$250 million to approximately$3 billion .
Here are some important facts about these outstanding directors that
- Leading
Tempur Sealy's Board in actively overseeing the Company's strategy and its execution, ensuring management accountability and upholding the highest standards in corporate governance. - Private equity experience that is vital to
Tempur Sealy's strategy in delivering for its largest two customers, Mattress Firm & Sleepy's. - Serving as Senior Managing Director at
TA Associates , a global private equity manager with$11 billion of capital under management. Before his retirement fromTA Associates in 2008, Mr. McLane headed the firm's Financial Services andConsumer Group and served on its Executive Committee for 20 years. - Leading investments in 32 companies that delivered an average annual internal rate of return of 35% and an average capital return multiple of 5.7x.
- Serving on the Board of Directors of 29 companies, including seven public companies.
- A significant long-term holder of
Tempur Sealy stock. Today,Mr. McLane and his wife beneficially own or control approximately 1.30% of the Company's outstanding shares[2].
- Additional growth equity experience that provides important insights into managing and growing companies.
- As a co-founder of
Friedman Fleischer & Lowe ("FFL"), he helped to manage and build the company into a leading private equity firm with over$4.5 billion under management and investments in approximately 30 companies since inception. - On average, FFL portfolio companies have grown earnings and book value substantially during FFL's ownership.
- Former investment banker at Morgan Stanley and management consultant at
Bain & Company , providing valuable and diverse experience.
- Transforming the Company with the acquisition of Sealy, creating the world's largest bedding provider.
- Introducing a record number of new products to drive topline growth – including the TEMPUR Cloud mattress line, which nearly doubled Tempur-Pedic's U.S. mattress business – solidifying
Tempur Sealy's industry leadership. - Seasoned business leader, previously President of Campbell Soup Company's
North America division, responsible for businesses with annual revenues exceeding$6 billion ; oversaw sales and earnings growth in each year as President. - Building a best-in-class management team that includes executives with a proven track record at a range of blue-chip, global companies.
For each of the past six years, Messrs. McLane, Masto and Sarvary have received votes cast "FOR" their re-election from over 99% of shareholders voting for directors at the Company's annual meetings – including, over the last two years, votes cast "FOR" their re-election from
YOUR BOARD IS FOCUSED ON DELIVERING RESULTS FOR SHAREHOLDERS
The Tempur Sealy Board is highly focused on ensuring that the Company is pursuing the right plan for continued growth and enhanced profitability. We are active and engaged in our oversight of the Company's management and strategy, and hold ourselves to standards that we believe significantly exceed typical Boards. (Detailed information about all other Tempur Sealy Board members can be found in the appendix below.)
In addition to regular board meetings and the work of our three standing committees, ad hoc committees are a crucial component of our engagement and oversight of the Company, and a tool we have used since our initial public offering. Under the direction of Messrs. McLane and Sarvary, for example, the Board has formed three ad hoc committees since 2012 focused on the transformative Sealy acquisition:
- Sealy Acquisition committee, formed in 2012, chaired by
Mr. McLane and included Messrs. Masto and Doyle; Directed all activities during evaluation, negotiation and due diligence. - Sealy Integration committee, formed in 2013, chaired by
Ms. Dilsaver and including Messrs. Hoffman, Masto and Heil; Oversaw all activities during integration, both pre- and post-closing. - Sealy Transformation committee, formed in 2014, chaired by
Mr. Heil and including Messrs. Rogers and Doyle. This committee, whose members all have extensive manufacturing experience, is overseeing the operational improvement program across Sealy's entire supply chain.
As part of its ongoing strategy-building efforts, approximately every other year, the Tempur Sealy Board holds a strategy session that includes facility tours and meetings with key regional personnel in a location that is relevant to the objectives that the Company is pursuing. For example, in 2011,
Your Board's engagement with the Company and its management team is deep and hands-on, and extends far beyond scheduled meetings and strategy sessions. We are in constant contact with
YOUR BOARD IS COMMITTED TO STRICT OVERSIGHT AND ENSURING MANAGEMENT ACCOUNTABILITY
Your Board has played a critical role in identifying and retaining
Furthermore, the independent Compensation Committee of the Board oversees an executive compensation program that is performance-based and aligned with shareholder interests. Payouts on annual cash bonus incentives vary significantly depending on results achieved. Bonus payouts for
YOUR BOARD FACILITATES REGULAR COMMUNICATION BETWEEN TEMPUR SEALY AND ITS SHAREHOLDERS
We are committed to building and protecting shareholder value and are taking actions to deliver on this responsibility. To ensure that the Company is taking the right steps to accomplish its objectives, we have recently been on the road meeting with many of our large shareholders to hear their feedback and solicit their input regarding
We have a robust shareholder communications program that is led by our management team, and reviewed in detail by the full Board at every meeting. We are strong supporters of effective communications with our shareholders and value the development of more engagement between shareholders and directors. To that end, we are working as a Board to develop over the next year comprehensive programs and mechanisms for increased direct engagement and interaction between our Board and our shareholders.
EGAN
ISS REPORT DEMONSTRATES A LACK OF KNOWLEDGE AND UNDERSTANDING OF TEMPUR SEALY AND ITS INDUSTRY – AND THE VALUE OF A BOARD WITH DEEP AND COMPLEMENTARY EXPERTISE
We are pleased that Egan Jones Proxy Services, a proxy advisory firm, has recommended that shareholders vote FOR ALL of the
In contrast, in a recent report issued on
We believe shareholders should not give credence to the ISS decisions, given that ISS has consistently supported the election of ALL Tempur Sealy director nominees in each year since 2011, and in 2014 and 2015 awarded the Company and its Board with an overall Governance Quick Score in the top decile category, indicating a strong alignment with corporate governance best practices. Consequently,
Further, shareholders should keep in mind that ISS evaluates governance issues, and is not an expert on business or investment analysis. ISS has consistently taken a positive stance regarding our governance structure, and retains its positive view in its latest report. Its recommendation on director voting is based entirely on its misguided assessment of the business, and it does not point to any meaningful governance concerns. When it comes to the business analysis, shareholders should carefully consider the independent views of equity analysts that have followed the Company much more closely and understand it far better than ISS.
For instance, the same day ISS issued its report,
"We sympathize with H Partner's frustration over the company's more volatile performance since the industry shifted in 2012 and Tempur Pedic acquired a more complex business in Sealy, but we see little in its proposals to further enhance shareholder value beyond current company plans. We believe the TPX management team has its arms around key issues disrupting its recent performance and the business is poised for inflection. In our view, core
-
SUPPORT YOUR BOARD – VOTE THE WHITE PROXY CARD TODAY
Your directors and management team have been responsible stewards of your investment and have guided
As you conclude deliberations on this important vote, we ask that you support all of
Your Board of Directors is asking you to support the election of Messrs. McLane, Masto and Sarvary and ALL of its directors at the Annual Meeting by voting the WHITE card TODAY.
We also encourage you to visit the special Annual Meeting section of the
On behalf of
Sincerely,
/s/ |
/s/ |
/s/ |
/s/ |
/s/ Sir Sir |
/s/ |
/s/ |
/s/ |
/s/ |
/s/ |
/s/ |
INVESTOR CONTACT INFORMATION
If you need assistance voting your shares, please contact our proxy solicitor D.F. King & Co., Inc. toll free at (877) 283-0319, toll at (212) 269-5550 or email at [email protected]
ABOUT
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements," within the meaning of the federal securities laws, which include information concerning one or more of the Company's plans, objectives, goals, strategies, and other information that is not historical information. When used in this press release, the words, "assumes," "estimates," "expects," "guidance," "anticipates," "projects," "plans," "proposed," "intends," "believes," and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements include, without limitation, statements relating to the Company's expectations regarding its strategic priorities and building and protecting shareholder value. All forward looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct.
Numerous factors, many of which are beyond the Company's control, could cause actual results to differ materially from those expressed as forward-looking statements. These risk factors include risks associated with the Company's capital structure and increased debt level; the ability to successfully integrate
There are a number of risks and uncertainties that could cause the Company's actual results to differ materially from the forward-looking statements contained in this press release. There are important factors, many of which are beyond the Company's control, that could cause its actual results to differ materially from those expressed as forward-looking statements in this press release, including the risk factors discussed under the heading "Risk Factors" under ITEM 1A of Part 1 of our Annual Report on Form 10-K for the year ended
Learn More: Your Well-Balanced Board, With Diverse Experience and Senior Leadership
In addition to Messrs. McLane, Masto and Sarvary, your Board includes:
Proven Executive |
Relevant Experience |
Valued Skills |
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· Former President & CEO, · Former Senior Manager, CPA, · Board Experience: Aeropostale,
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· Finance / Accounting · Management · Senior Leadership at Company with Global Operations · Consumer / Retail Experience |
Frank Doyle
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· President & CEO, · Vice Chairman, CPA, · Board Experience: Liberty Mutual, Eversource Energy,
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· Finance and Accounting · Information Technology · Management · Senior Leadership at Company with Global Operations · Manufacturing · Risk Management |
John Heil |
· Former President, · Former President and Managing Director of Heinz Pet Products: · Various Leadership Roles, Heinz · Board Experience: VCA Antech
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· Operations / Strategy · Management · Senior Leadership at Company with Global Operations · Consumer Branded Products Experience · Manufacturing |
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· Former President, Global Grooming, Procter & Gamble o Ran Gillette Blades & Razors business: <money>$5B in sales, 130 countries, 8 factories o Developed and launched 4 of the most successful consumer products in history (Sensor, MACH3, Fusion, Venus) · President, Duracell North Atlantic · President,
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· Senior Leadership at Company with Global Operations · Consumer / Retail Experience · Marketing / Advertising · New Product Innovation |
Sir |
· Various Leadership Roles, Cadbury Schweppes · Former Chair, Premier Brands · Former Chair, Food from · Board Experience:
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· Senior Leadership at Company with Global Operations · Consumer / Retail Experience · Management / Operations |
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· Professor of Business Administration, · Board Experience, Fashion to Figure, · Consultant on retainer for multinational corporations including Estee Lauder, Starbucks and Omnicom |
· Strategic Branding · Corporate Repositioning · Management |
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· Former President & CEO, Sealy · Various Leadership Roles, Sealy
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· Senior Leadership at Company with Global Operations · Consumer / Retail Experience · Management / Operations · Manufacturing |
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· Former CEO,
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· Senior Leadership at Company with Global Operations · Consumer / Retail Experience · Management / Operations |
[1] Represents performance from
[2]Beneficial ownership calculated as described in the Company's proxy statement. Includes a total of 501,058 shares reported as beneficially owned by
[3] Permission to use quotation was neither sought nor obtained. The quotation presents only a brief excerpt from the selected analyst report and does not purport to be comprehensive or to summarize the entire content of the report. The Company is not responsible for the accuracy or completeness of the report. The presentation of this excerpt should not be read to imply adoption or endorsement by the Company of the report or the views expressed in the report.
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