Emerson Names New Board Member After Pressure From Activist Investor

(Bloomberg) -- Emerson Electric Co. appointed a new board member and said it would conclude a strategic review by early next year as investor D.E. Shaw & Co. attempts to shake up the maker of automation equipment.

Mark Blinn, a former chief executive officer of Flowserve Corp., was among four board candidates D.E. Shaw had recommended, Bloomberg News reported Monday. With his appointment Tuesday, Emerson's board now has 11 directors, 10 of whom are independent, the St. Louis-based company said in a statement.

“Mark has a breadth of knowledge in energy and automation end markets,” Chief Executive Officer David Farr said in the statement. “Mark's insights and global perspective will be highly valuable as we conduct our comprehensive review.” The company said separately that it would present its conclusions at a February investor conference.

D.E. Shaw is pushing Emerson to split itself into two companies: a maker of industrial-automation tools and a manufacturer of climate controls for buildings. The moves, combined with other measures such as cost cuts, could create more than $20 billion in equity value, the New York-based activist investor said.

D.E. Shaw expressed support for Blinn's appointment Tuesday. “We appreciate Mark's willingness to serve as a director, and appreciate the board's responsiveness to our concerns and engagement efforts,” Managing Director Edwin Jager said in a statement.

The investment firm said Emerson also agreed to review its executive compensation program to more closely tie it to performance and to change its bylaws to provide for one-year director terms.

In exchange, D.E. Shaw said it has agreed to vote to elect the board's nominees and that it would continue to engage with the company on its ongoing strategic review of its operations, which was announced Oct. 1.

Emerson said in a separate statement it plans to present the conclusion of the review and update its 2020 guidance at its February investor conference.

The company's shares have underperformed industrial peers since Emerson lost about a third of its sales in a 2015 restructuring by Farr, who has been the company's CEO since 2000. That overhaul took the five-unit company down to two: automation equipment and building-related goods for homes and businesses, including air conditioner compressors and garbage disposals.

--With assistance from Scott Deveau.

To contact the reporter on this story: Thomas Black in Dallas at tblack@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Tony Robinson

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