Ameron Directors Defend CEO.

Ameron International is swinging back.
After calls by activist hedge fund Barington Capital
Group for the ouster of Ameron CEO James
Marlen, the company ’s independent directors
issued a letter Wednesday, calling the firm’s
attacks “vindictive” and its criticisms “inaccurate.”
“Ameron has been extremely successful during
Mr. Marlen’s tenure as CEO,” the directors said.
“The Company’s successes over this period
resulted from the strategic direction of the Board
and the CEO, along with the extraordinary efforts
of Ameron ’s many talented and highly-motivated
employees.”
Barington owns less than four percent of the
company, which manufactures products for the
chemical, industrial, energy, transportation and
infrastructure industries. In a letter dated January
5th, the hedge fund claimed that Mr. Marlen used
Ameron to enrich himself and his family by
taking an overly generous salary and placing
three of his sons in senior positions at the
company and its affiliates. The firm thinks
Ameron should be trading above $100 a share
from its current price around $78.20.
The claims, said Ameron, are without merit. The
board highlighted shareholder returns since 1993,
when Mr. Marlen joined the company, as partial
proof. Ameron has returned 12.24 percent in that
period, while the Russell 2000, Dow Jones
Industrial Average, S&P 500 and NYSE Broad
Index have posted single digits returns over the
same time.
“Our support for Mr. Marlen and the Company’s
executive team is founded on solid facts that your
recent letter and your prior announcements
conveniently ignore, ” the board says,
commenting for the first time since Barington
aired their grievances about Mr. Marlen.
Barington Capital raised concerns in its letter that
three of Mr. Marlen ’s sons have been employed
by the company or affiliates. Only one son’s role
was disclosed.
To that accusation, the company’s directors had
the following to say:
Regarding your request that the Board review
certain related-party transactions and perquisites
disclosures, we believe that strong internal
controls and disclosure controls are in place and
that the Company strives in good faith to fully
comply with all applicable disclosure
requirements. Nevertheless, we take shareholder
views seriously, and we will double-check our
disclosures, as we would if any shareholder
inquired about such matters.
There is at least one point the hedge fund and the
Pasadena-based company agreed on.
“As to one of your observations, we agree with
the recognition that Ameron has significant
potential, ” the directors said.


Source: Http://dealbook.nytimes.com/2011/01/12/ameron-directors-defend-ceo/