Investor Daniel Loeb, who last month blasted Warnaco Group Inc.’s top officials in a filing with the Securities and Exchange Commission, has reduced his stake in the firm —and toned down his rhetoric. This followed a meeting with...
Investor Daniel Loeb, who last month blasted Warnaco Group Inc.’s top officials in a filing with the Securities and Exchange Commission, has reduced his stake in the firm —and toned down his rhetoric. This followed a meeting with Warnaco chief executive Joseph Gromek and the appointment of a new chief financial officer at the diversified apparel firm.
Investment firm Third Point Management Co. LLC, of which Loeb is managing member, sold more than 1.2 million shares of Warnaco for about $22.4 million between Aug. 29 and Sept. 17, according to a Schedule 13D filing with the SEC. Prices ranged from $16.12 to $16.72 a share and the total cost was about $24 million. This reduced Third Point’s holdings in Warnaco to 2.1 percent of outstanding shares, below their previous level of 5 percent, the minimum at which firms and individuals must report their holdings in publicly held firms to the SEC.
In a communiqué last month, Loeb, as reported, called for a number of resignations and demotions at Warnaco.
On Wednesday, in a letter to Gromek included in the SEC document, Loeb wrote, “While our holdings have fallen below the company’s 13D radar screen, please trust that the actions of the board have not fallen below ours. We maintain a steely eye on how the board members are discharging their duties and how they are being compensated.”
In the letter, Loeb thanked Gromek for meeting with him, professed satisfaction with Warnaco’s executive management and strategic direction, and even cheered the termination of Joe Fogarty, “the $475 per hour cfo.” As reported, Warnaco appointed Lawrence Rutkowski as senior vice president and cfo, succeeding Fogarty, earlier this week.
However, Loeb said he was “disappointed” that Warnaco hadn’t taken action to terminate Stuart Buchalter as non-executive chairman of the firm. “I reiterate my strong objection to Mr. Buchalter’s role at Warnaco, his unjust compensation and strongly urge the board to recommend his ouster at the earliest possible time.”
Loeb had previously described Buchalter’s annual salary of $500,000 as an “outrageously high sum for a non-executive chairman who has already been gifted 12,975 free shares.”However, the salary was cut in half following Gromek’s appointment as ceo in April.
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