Allegations Against Dennis Reilley
Mantle Ridge’s Proposed Executive Chairman Candidate Appears Alarmingly Unfit to Lead Air Products or Any Public Company.
There are deeply concerning questions about whether Mr. Dennis Reilley, as a director of three companies, reportedly leaked confidential information about those companies, in one case about merger negotiations, with a third party. These call into question his fitness to serve on any public company’s board of directors and raise concerns about Paul Hilal’s judgment in nominating him to our Board.
Paul Hilal wants to turn over the Board and the Company to Mr. Reilley's leadership, despite Mr. Reilley's apparent inability to comply with his basic duty of confidentiality as a director.
A portion of the transcript from a 2019 court hearing approving a guilty plea by John Davidson in connection with providing a false statement to the FBI:
MS. ANDERSON [Assistant U.S. Attorney]: And he D.R. provided you with nonpublic information he had received from all three of those boards, correct?
THE DEFENDANT [John Davidson]: Yes, ma'am.
MS. ANDERSON: And he D.R. forwarded emails he received as a board member?
THE DEFENDANT: Yes, ma’am.
[...]
MS. ANDERSON: You had, in fact, received nonpublic information from D.R. that he had acquired from his board work at Covidien, Marathon and Dow, correct?
THE DEFENDANT: Yes, ma’am.
MS. ANDERSON: And sometime between March 2014 and May 15th, 2014, you specifically learned from D.R. about developing negotiations about Covidien’s merger with or acquisition by Medtronic, correct?
THE DEFENDANT: That is correct.
MS. ANDERSON: And you understood that information to be nonpublic, correct?
THE DEFENDANT: Yes, ma'am.
United States of America v. John Kenneth Davidson, Case No. 19-cr-56, filed on February 25, 2019. Transcript dated March 5, 2019. Mr. Reilley resigned from the board of Marathon Oil in February 2019 and from the boards of DowDuPont and CSX in December 2018.
Read More on Dennis Reilley
Dec 13 2024
Activist Air Products Board Nominee is Said to be Source of Decade-old M&A Leak: Court Filing
Semafor
Feb 11 2020
Oklahoma City Oilman Fined $100,000 for Lying to the FBI
The Oklahoman
Dec 13 2019
SEC Accuses Oklahoma Oilman of Making $1.18 Million off Insider Trading
The Oklahoman
Dec 12 2019
SEC Complaint
United States Securities and Exchange Commission vs. John Special and Michael Murphy
Dec 19 2019
SEC Complaint
United States Securities and Exchange Commission vs. John Kenneth Davidson
Mar 5 2019
Trial Transcript
The United States of America vs. John Kenneth Davidson
Feb 27 2019
FBI Insider Trading Probe Results in Criminal Charge in Oklahoma City Federal Court
The Oklahoman
Advocacy
Recent Praise from Mantle Ridge’s Letters to Air Products’ Board
Mantle Ridge Statements in Support of Air Products Nominees*
Despite publicly criticizing Air Products management and leadership, Mantle Ridge and its Founder and CEO, Paul Hilal, were privately supportive of Air Products CEO, Seifi Ghasemi, and Lead Independent Director, Ed Monser, just weeks ago. These actions reinforce the obvious discrepancy between what Mantle Ridge says and what they do. As the Annual Meeting approaches, shareholders should consider the following:
*Permission to use quotations neither sought nor obtained
Mantle Ridge’s Proposed Nominees
We believe Mantle Ridge nominees have been selected not because their experience is superior to or more relevant than our existing nominees, but rather because of pre-existing relationships with Mr. Hilal or reliability as a previous activist nominee.
Mantle Ridge Chairman Nominee
Media reports raise serious questions regarding whether Mr. Reilley repeatedly leaked confidential Board materials.
- Has not sat on a public Board in nearly 6 years since resigning from three directorships shortly before news reports surfaced that he was being investigated by the FBI for insider trading*
- Has not held an executive or operating position in over 17 years since retiring in 2007
- Owns no shares in Air Products
- Longstanding relationship with Paul Hilal including his tenure on the CSX Board and serving as a nominee of Mantle Ridge in its activist fight at Dollar Tree
- Has a two-year consulting agreement with Mantle Ridge, misaligning his interests from those of Air Products’ shareholders
Activist Director for hire:
- Mantle Ridge’s Candidate at CSX and Dollar Tree
- Founding Member of Trian Advisory Partners; Publicly Supported Trian’s Activist Campaigns at Disney, P&G, and DuPont
*Nolan Clay, The Oklahoman, February 27, 2019, “FBI insider trading probe results in criminal charge in Oklahoma City federal court“
Mantle Ridge would remove a successful executive leader amid a thorough succession process currently underway. Learn more about Seifollah (“Seifi”) Ghasemi, Chairman, President and Chief Executive Officer, a highly respected executive in industrial gases and specialty chemicals.
Mantle Ridge CEO and Nominee
No relevant industry experience coupled with a track record of value destruction at Mantle Ridge:
- No industry experience with the board or operations of an industrial gas or chemicals company
- Track record of value destruction and mismanaged succession processes at all of Mantle Ridge’s major activism campaigns – Aramark, CSX, and Dollar Tree, overseen from Vice Chairman role at all three companies
- Either was not aware of or did not care about alleged insider trading probes involving Dennis Reilley, which demonstrates lack of judgment and care for corporate governance and ethics
- Dissident director slate appears assembled largely based on previous relationships and the activism involvement as opposed to fit-for-purpose recruitment
- Every Mantle Ridge candidate has served on an activist’s dissident nominee slate in one or more contested proxy situations and Mr. Reilley has a longstanding relationship with Mr. Hilal
- Under his board oversight, CSX said in October 2024 it had received a subpoena from the Securities and Exchange Commission over an accounting restatement, as well as information requests about some of the company's performance metrics
Track record of value destruction:
TSDR relative to the S&P 500 during his Board tenures*
- Dollar Tree (104%)
- CSX (69%)
- Aramark (63%)
*Reflects dividend-adjusted total return percentage over tenure or as of December 13, 2024 for current positions
Mantle Ridge would remove our Lead Independent Director’s significant operating and supply chain expertise. Learn more about Edward L. Monser, Lead Independent Director of Air Products, who has significant experience in industrial operations and supply chain optimization.
Mantle Ridge Nominee
Less Relevant Experience Than Targeted Directors
- Appears to have significantly less legal experience than Mr. Cogut
- Energy experience via advisory work at MAC Energy Group is duplicative given Lisa Davis and Alfred Stern’s significant energy expertise
- Public Board experience includes involvement in controversial activism campaigns
Former Activist Nominee:
- Clinton Group’s candidate at Gleacher & Company
- While a Director at Imation, launched proxy contest with Clinton Group at Arlington Asset Investment
Governance / Ethics Issues:
Ecolab
- Tenure as a director at Ecolab includes numerous class action lawsuits pertaining to wage and hour violations resulting in $50 million in settlement payments; Ms. McKibben currently sits on the Compensation & Human Capital Management Committee
- Tenure also overlaps with former Mantle Ridge nominee Jonathan Zillmer; Mr. Zillmer was appointed via Mantle Ridge campaigns both as a director at CSX and as CEO at Aramark
Imitation
- While a director at Imation, McKibben appears to have allowed the company to be used as a shell by hedge fund Clinton Group for an unsuccessful activist campaign, drawing criticism from ISS and Glass Lewis, who criticized Imation heavily for engaging in related-party transactions with Clinton that they said served to enrich the latter. While McKibben was a director, Imation ultimately delisted and its share price fell to a low of $0.75
Mantle Ridge would remove significant legal and M&A expertise. Learn more about Charles Cogut, Independent Director of Air Products and a leading corporate lawyer with multi-jurisdictional M&A expertise.
Mantle Ridge Nominee
Less Relevant Experience Than Targeted Directors
- Public C-Suite and Board experience limited to U.S. companies
- Oil and gas industry credentials and renewable energy project experience pale in caliber to those of Lisa Davis
- As CFO of Southern Co between 2018 and 2021, Evans oversaw the finances of the Vogtle nuclear power plant expansion project, which was plagued by construction delays and cost overruns. The project, which was supposed to herald a nuclear power revival in the United States, was 7 years late and $17 billion over budget
Former Activist Nominee:
- Previous Board appointment via activism by Icahn at Southwest Gas has resulted in ~(75)% TSR vs. the S&P 500 over his tenure*
*Reflects dividend-adjusted total return percentage over tenure or as of December 13, 2024 for current positions
Governance / Ethics Issues:
- Tenure as CFO at AGL involved a regulatory action and class action lawsuit filed against an AGL subsidiary over allegations the company overcharged customers for both natural gas and for customer service charges
Mantle Ridge would remove critical energy and renewables expertise. Learn more about Lisa A. Davis, Independent Director of Air Products, who has extensive experience leading world-scale energy projects, including renewables.
