Key Summary: On March 30, 2023, Barry Sternlicht (9.4%) resigned from the board, protesting against CEO Marlow Hernandez. By April 2, 2023, Sternlicht, Elliot Cooperstone, and Dr. Lewis Gold (36%) formed a group to seek leadership changes. They issued press releases and letters advocating for CEO replacement and governance improvements, leading to litigation to reopen nominations. From May to June 2023, they launched a "Withhold Campaign" and nominated candidates, resulting in Hernandez's resignation and Mark Kent's appointment as interim CEO. On July 17, 2023, they noted shareholder discontent and called for further board changes. On November 7, 2023, the group disbanded after achieving their objectives.Market Cap: $57 million | Cano Health, Inc. provides primary care medical services to its members in the United States and Puerto Rico.
On March 30, 2023, Barry Sternlicht (9.4%) resigned as a director of the company. In connection therewith, he delivered a letter to the board in protest of the company management led by CEO Marlow Hernandez. Kindly click here, to read the entire letter.
On April 2, 2023, the Former Directors (Barry Sternlicht, Elliot Cooperstone and Dr. Lewis Gold) and certain of their affiliates (together own 36%) entered into the Group Agreement pursuant to which they agreed to act together to pursue change at the company, including, but not limited to, the replacement of the CEO, sale of non-core assets and enhancement of shareholder value. Source
On April 10, 2023, the Former Directors (36%) issued a press release and an open letter to the shareholders expressing their belief that urgent leadership and strategy changes are needed at the company.
On April 14, 2023, the Former Directors delivered a letter to the board demanding that the Board immediately re-open the nomination and proposal window under the company’s by-laws for a period of at least 30 days, given the recent disclosures by CEO Dr. Marlow Hernandez and the company and the significant changes at the company that have all occurred following the expiration of the nomination and proposal deadline.
On April 26, 2023, the Former Directors delivered a letter to the shareholders stating their belief that the appointment of Solomon “Sol” Trujillo as Chairman represents a self-interested entrenchment maneuver and slap in the face to concerned shareholders. They further reiterated their concerns that Dr. Hernandez must be removed as CEO given his poor capital allocation, abysmal performance, and disregard for good corporate governance, transparency and ethics.
On April 27, 2023, the Former Directors delivered a letter to the shareholders regarding the board’s entrenchment maneuvers and latest governance failures. They highlighted the interlocks among board members, including Mr. Trujillo and CEO Marlow Hernandez.
On April 28, 2023, the Former Directors commenced a litigation in the Court against the current members of the Board and the company seeking, among other things, an order of the Court compelling the company to reopen the window under the company’s Bylaws for stockholders to propose the removal of one or more directors and to nominate director candidates and bring forth other proposals at the 2023 AGM. Source
On May 10, 2023, the Former Directors filed proxy materials seeking shareholders to vote WITHHOLD with respect to the election of Dr. Alan Muney and Ms. Kim M. Rivera (the “Company Nominees”) to the board as Class II directors.
On May 11, 2023, the Former Directors issued an open letter to stockholders announcing the launch of the Withhold Campaign so that regardless of the outcome in their pending litigation to compel the company to reopen the nomination and proposal window under the By-Laws, stockholders can make their voices heard at the annual meeting.
On May 18, 2023, the Former Directors Group issued a press release soliciting votes to WITHHOLD with respect to the election of certain directors, Dr. Alan Muney and Ms. Kim M. Rivera, of Cano Health, Inc. at the company’s 2023 AGM.
On May 19, 2023, the Former Directors Group nominated two candidates for election to the board at the 2023 AGM. Source
On May 22, 2023, the Former Directors Group filed proxy materials seeking support for their nominees.
On May 25, 2023, the Former Directors Group filed proxy materials soliciting WITHHOLD votes against the re-election of Dr. Alan Muney, Chair of Cano’s Compensation Committee, and Kim Rivera, Chair of Cano’s Nominating and Corporate Governance Committee. Also, the group launched a website to communicate with the Company’s stockholders regarding the annual meeting. The website address is www.savecano.com. Source
On May 30, 2023, the Former Directors Group issued an Investor Presentation titled “The Urgent Need for Changes in Leadership and Strategy at Cano Health” that outlines the urgent case for changes in leadership and strategy at the Company.
On June 7, 2023, ISS and Glass Lewis have recommended that Cano stockholders withhold support for the re-election of Company’s two director candidates, Dr. Alan Muney and Kim Rivera as directors at the 2023 AGM on June 15, 2023. Source
On June 15, 2023, the company announced the results of its AGM. Based on the vote tabulation by the Company’s proxy solicitor, Cano Health’s two director nominees, Dr. Alan Muney and Kim Rivera, have been re-elected to the Company’s Board of Directors. Source
On June 16, 2023, Mark Kent, the current Chief Strategy Officer, has been appointed as Interim CEO of the company, while an external search is underway to find a permanent successor. Dr. Marlow Hernandez has agreed to resign immediately as CEO but will remain as a member of the Board. Source
On June 20, 2023, the Former Directors Group issued a response to the Company's announcement. They acknowledged the resignation of Dr. Marlow Hernandez as CEO, which they considered a positive step. They expressed their support for Mark Kent as a suitable replacement for Dr. Hernandez, citing his integrity and relevant healthcare experience. However, they emphasized the need for a credible and confidence-inspiring Board to support the new management team in achieving a lasting turnaround for Cano. They criticized the current Board, which includes two "WITHHOLD" directors and the former CEO, stating that it is not adequately equipped to oversee the company during this critical period. Source
On July 17, 2023, the Former Directors Group (35%) expresses satisfaction with over 82% of stockholders rebuking the current Board at the recent Annual Meeting. They credit their efforts for the CEO's resignation due to mismanagement. At the same time, the group stated that the Board has disregarded the unambiguous results of the Annual Meeting, where more than 82% of the votes cast WITHHELD support for Dr. Alan Muney and Kim Rivera. The letter criticizes the Board for ignoring shareholder disapproval and demands a board refreshment process. They call for new leadership support and policy changes. Source
On August 14, 2023, the Former Directors Group stated that after the Q2 earnings release and sale intent announcement, Former Directors voiced dissatisfaction with company performance and governance. They questioned the Board's effectiveness in overseeing the sales process and requested Mark Kent's immediate appointment as CEO and Board member, specific Board members' resignation, and the addition of Lewis Gold and Guy Sansone to facilitate the sale process. Source
On November 7, 2023, the Former Directors Group stated that while they strongly opposed the current board due to their failure to address issues and resulting shareholder value loss, they have decided to disband. They stated that they successfully achieved key objectives, including Dr. Marlow Hernandez's departure from the board and the appointment of Mark Kent as the permanent CEO. Source
Past
On March 9, 2022, Third Point LLC (6.4%) stated its belief that the Board should immediately engage financial and legal advisors to commence a review of strategic alternatives. It believes this strategic review should focus on a sale of the company, and that a properly run sales process is likely to result in offers representing a substantial premium to the company’s trading price. It also stated that it has no present plan to pursue a proxy contest with the company, but may consider initiating a proxy contest seeking to elect one or more members of the Board and bring such other proposals as Third Point deem appropriate should the Board not adequately address the value gap between the current share price of the company and the intrinsic value thereof, including by commencing a review of strategic alternatives. Source
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