Freshpet, the New Jersey-based pet food company at the center of a proxy fight, has announced another board departure ahead of the annual meeting.
In a regulatory filing Friday, the company announced that David Basto had resigned with effect May 31, as a result of his promotion to lead consumer, media and retail investments in the Americas at private equity firm Carlyle Group.
“Mr. Basto has therefore concluded that he is no longer able to dedicate the requisite time and attention needed to continue serving on the Freshpet board at this time, due to increasing firm obligations,” the filing stated.
The departure will not create a vacancy. Freshpet is again reducing the size of its board, as it did when it recently announced that Charles Norris would not stand for re-election.
Jana had previously criticized Basto’s role on the board on account of his concurrent membership of the board of Compana Pet Brands, a company it suggested was a competitor and was also a Carlyle portfolio company.
“While the long overdue resignation of David Basto might cure a symptom, we believe the root cause of the board’s seeming dysfunction—rampant conflicts of interest, oversight failures, breaches of fiduciary duty, and entrenchment tactics—all remain unaddressed,” the activist said in a statement.
Freshpet said in response that its conflict of interest policy had been “consistently enforced.”
“No member of the board or management has used company resources for outside ventures; any board member’s or executive’s outside investments, board memberships or consulting interests are strictly governed by Freshpet’s non-compete policy,” it said in Friday’s statement.
The activist nominated four directors to Freshpet’s board but then discovered only three would be up for election when Freshpet elected to move Norris’s soon-to-be-vacant seat to another class. The board will be fully destaggered by 2025, a timeline Jana has also criticized.
Freshpet has added one new director to its board this year, saying that the appointment of Dave Biegger fulfilled a need for supply chain expertise that Jana had urged the company to address.
The meeting will take place on July 25.