Goodyear Tire to expand board in settlement with Elliott
Reuters
Published Jul 25, 2023 09:40AM ET
Updated Jul 25, 2023 12:33PM ET
(Reuters) -Goodyear Tire & Rubber Co said it would add three directors in agreement with Elliott Investment Management, months after the activist investor disclosed a stake and called for changes to strengthen the company's financial position.
Elliott's investment announced in May made it one of Goodyear's biggest investors. The firm urged the company to refresh the board, sell its stores and conduct an operational review.
On Tuesday, Goodyear said it would establish a strategic and operational review committee. The committee will be chaired by CEO Richard Kramer and will include two of the three new directors. The activist firm had proposed five new directors join the company's board.
Elliott, which has a history of taking board seats at companies including Twitter and eBay (NASDAQ:EBAY), had previously criticized the tyre-manufacturer for mismanagement and lagging behind its rivals, Michelin (EPA:MICP) and Bridgestone.
"We have been encouraged by Goodyear's openness to taking actions necessary to realize its full potential," Elliott executives said in a statement on Tuesday.
Tyre-makers have come under pressure over the past few years from cheaper Chinese rivals and face scrutiny from regulators on concerns of tyre pollution.
In its most recent quarter, Goodyear posted an adjusted quarterly loss of 29 cents per share, compared with analysts' average estimate of 30 cents.
The Akron, Ohio-based company said it would nominate up to 12 directors for election at its annual meeting in 2024, including the three new directors.
Evercore, Lazard (NYSE:LAZ) and Goldman Sachs (NYSE:GS) are financial advisers to Goodyear, while Paul Weiss the legal counsel.
Goodyear's shares were largely flat in early trading after rising about 3% before the bell.
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Written By: Reuters
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