Management at fleet payments WEX faces proxy battle

In a proxy filing Friday with the Securities & Exchange Commission, Impactive Capital Master Fund LP and affiliates said it had been “significant stockholders” in WEX (NYSE: WEX) for five years.

WEX, in its 10-K report filed to the Securities and Exchange Commission this year, described its Mobility segment as a “global leader in fleet payment solutions, transaction processing, and information management.”

“We support fleets of all sizes globally through our proprietary closed-loop networks and a suite of software solutions that help manage fuel, EV charging, and operational workflows,” the annual 10-K for 2026 said.

Impactive, in its proxy, said of its relationship with WEX: “For the length of our investment, we have attempted to maintain an open and collaborative relationship with the company and its board of directors, but in recent years that relationship has been severely strained by the mounting challenges facing the Company and the Board’s apparent unwillingness to take action to hold management accountable for performance.”

Five-year shareholders

Impactive first invested in WEX in 2021, according to its proxy. 

The Impactive proxy said it has sought to have WEX place more “stockholder perspectives” on the board of directors at WEX. But it has been “repeatedly rebuffed and refused,” the proxy said.

Impactive said its plan of action is to have three directors voted into office at the WEX annual meeting to be held May 5. There are six directors Impactive is not opposing but has urged shareholders not to vote for Nancy Altobello, Stephen Smith and Melissa Smith.

The Impactive proxy recaps a long history of interactions between the company and WEX management. Among the issues Impactive raised in those meetings or phone calls include criticism of WEX’ acquisition of Payzer, which it described as “an unprofitable company with a limited strategic fit that added to WEX’ complexity.”

The history of the interactions include Impactive’s request that a representative of that company be placed on the board of directors, which has not occurred. 

Challenge last year failed, but still lots of ‘no’ votes

The three incumbents that Impactive targeted last year for a no vote were re-elected to the board. But the Impactive proxy said their “no” votes were anywhere from 30.6% to 37% of the vote.

The three director nominees Impactive is putting forth this year for the three open slots are Kurt P. Adams, Ellen R. Alemany, and Lauren Taylor Wolfe, who is a co-founder of Impactive.  

Taylor Wolfe’s title at Impactive besides co-founder is managing partner. Adams is CEO of IPC Systems and former CEO of Optum Financial. Alemany is the vice chair at First Citizens BancShares and formerly the chair of CIT.

Taylor Wolfe comes in for hefty criticism in the WEX proxy. Among the criticisms: her husband is with a venture capital firm with a large investment in Ramp Business Corp., which also is in the payments business and is viewed by WEX as a competitor, raising conflict of interests questions. She also was described by WEX as “disruptive” as a director at another company. 

Performance issues cited

In the proxy, Impactive reviewed WEX’ performance compared to the S&P 400 and what it said was WEX’ closest competitor, Corpay (NYSE: CPAY). 

Among the numbers cited are a five-year total return of 20.1% for WEX, 37.6% for Corpay and 56% for the S&P 400.

WEX’ stock price per Barchart is up 27.2% in the last year. But over the last three years, the stock price has largely been lower. It closed Friday at $159.29. In early April 2023, it traded at about $180 per share.

Impactive at one point had more than a 7% share in WEX. However, in its letter to shareholders it said that number is down to 4.9%.

WEX got out in front of the Impactive proxy in its own proxy filed with the SEC earlier this week. In it, the company said “replacing these incumbent directors would jeopardize the Company’s progress.”

It described Impactive’s desires as “financial engineering” – splitting up the Company on the belief that we might achieve a higher blended multiple, buying back stock or increasing our pricing. This stands in sharp contrast to the questions and suggestions we hear from our

other investors, which tend to focus instead on the fundamentals of our business: how can WEX drive further market share, use AI to grow and to expand margins and extend into adjacent end markets?”

Among Impactive’s criticisms of WEX management is the amount of money it paid CEO Smith.

“Since combining the CEO and Chair role under Ms. Smith, WEX directors have rewarded her with $85 million,” the letter said. “WEX’s CEO compensation has consistently increased despite missing targets provided to investors, because the Board has set her compensation targets below the numbers publicly guided to investors and significantly increased the median market capitalization of the comparable proxy peers relative to WEX’s own market capitalization. How can shareholders believe the Board, particularly the Leadership Development and Compensation Committee, will advocate for shareholder interests when they pay management more and more for continuously delivering less and less?”

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