* Forest CEO succession planning process is ongoing
* Independent directors leading CEO search process
* Forest takes aim at Ende, other Icahn nominees
* Forest shares up 0.9 pct
By Paritosh Bansal
July 9 (Reuters) – Forest Laboratories Inc said on
Monday its board had hired executive search firm Spencer Stuart
to find a successor to its 84-year-old chief executive, Howard
Solomon, and urged shareholders to reject director nominees put
forth by activist investor Carl Icahn.
The U.S. drugmaker said its independent directors are
leading the search process, which includes the consideration of
internal and external candidates. The company said it had a deep
management bench, which included David Solomon, who is the son
of its long-time CEO and was promoted in November 2010.
The company asked shareholders to vote for its full slate of
10 directors, and reject Icahn’s four nominees, including Eric
Ende, who is leading the proxy fight for the billionaire
investor.
The activist investor, who is Forest’s second-largest
shareholder with a stake of about 10 percent, re-launched a
proxy fight against the company in recent months after losing a
similar battle for board seats last year.
He has taken issue with the company’s corporate governance,
including its succession planning. Icahn has said he fears that
the CEO’s “buddy board” could make David Solomon the successor.
Forest plans to hold its annual meeting on Aug. 15. In a
letter to shareholder, released along with proxy materials ahead
of the meeting, Forest took aim at Icahn’s nominees and
criticism of the company.
Forest said Ende, who was also nominated by Icahn last year,
had received the fewest number of votes of any of the 14
director nominees in 2011. The company also took aim at Ende’s
compensation arrangement with Icahn, saying it gives the nominee
“an incentives to favor Icahn’s profits over the interests of
the rest of our shareholders.”
Reuters earlier reported the unusual arrangement, where Ende
stands to get 1 percent of Icahn’s profits over $47.50 per share
of Forest. That means, for example, if Icahn were to sell his
Forest shares at $50 apiece, Ende would receive $659,000.
Forest’s shares were up 0.9 percent at $35.79 during
afternoon trading on the New York Stock Exchange.
Icahn’s other three nominees are Pierre Legault, who until
recently was CEO of biotechnology firm Prosidion Ltd, a unit of
Astellas Pharma ; Daniel Ninivaggi, president of Icahn
Enterprises; and Andrew Fromkin, former CEO of Clinical Data
Inc, a company Forest bought last year.
Forest said Ninivaggi is a salaried employee of Icahn
Enterprises with no pharmaceutical experience, while Fromkin and
Legault have limited relevant experience. The company also said
it believed Fromkin was conflicted because of a prior
association with Clinical Data.
“We believe Mr. Icahn’s 2012 slate is even weaker than last
year’s,” Forest said in the letter.
