NEW YORK—Barington Capital Group L.P. has expressed its displeasure with the performance of Omnova Solutions Inc. in a letter sent to Kevin McMullen, Omnova's chairman and CEO, on Dec. 3.
The investment firm—which represents a group of shareholders that collectively own more than 2 percent of Omnova—said Omnova's shares have dramatically underperformed its peers and the market over the past one, three-, five- and 10-year periods and during McMullen's tenure as CEO.
“It is our belief that the company's poor share price performance reflects the market's dissatisfaction with Omnova's lack of strategic focus, disappointing return on invested capital and organic growth, frequent earnings shortfalls, and poor executive compensation and corporate governing practices,” James Mitarotonda, Barington chairman, president, CEO and co-founder, wrote.
Mitarotonda has served on the board of A. Schulman Inc., an industrial plastics company based in Akron, since 2005.
Mitarotonda said he would like the opportunity to discuss with McMullen solutions to enhance Omnova's profitability and share performance, including recommending independent directors to Omnova's board. He said Barington and Omnova representatives have had the chance to meet twice—in Boston on Sept. 8 and in Cleveland on Oct. 14.
Omnova released a statement on Dec. 3 in response to Barington's letter.
“The board of directors and management of Omnova Solutions are committed to act in the best interests of the company and all of its shareholders. As part of our continuing effort to maintain an open dialogue with our shareholders, we have had two recent meetings with Barington representatives to discuss their concerns and ideas,” McMullen said in a statement.
“We look forward to continuing our dialogue with shareholders as part of our process to help drive sustainable long term value,” the CEO added.