Shah Capital Opposes Novavax Board and Compensation

Activist investor Shah Capital has announced its intention to vote against the re-election of board nominees and the executive compensation package at NOVAVAX INC. This move signals renewed pressure on the vaccine maker to implement significant strategic and operational changes. Himanshu Shah, founder of the hedge fund, expressed frustration over the current leadership's failure to execute aggressive cost-cutting measures. Shah Capital, which holds a 9% stake in the company, is its second-largest shareholder. The firm is urging the board to reduce the senior management team by 30% and shrink the board of directors from eight members to five. > "My letter is an indictment of the leadership," Shah stated in an interview. The investment firm also criticized the existing partnership with SANOFI, noting that it has yet to yield substantial benefits for the company. Specifically, Shah highlighted delays in releasing late-stage results for a combined COVID-19 and influenza vaccine, a market estimated to be worth over $5 billion. > "We are both surprised and frustrated by Sanofi's continued delay in launching late-stage results for the COVID/influenza combo vaccine, a market worth more than $5 billion," Shah said. Beyond personnel changes, Shah Capital is calling for a share buyback of 10 to 20 million shares and the retirement of debt rather than adding to convertible debt. The firm is also seeking a long-term strategic investor to take a 10% to 20% ownership stake to help reshape the company's future. Despite the strong stance, Shah indicated he is not currently instigating a proxy fight, citing the difficulty of challenging an entrenched board. > "There is a strategic lack of conviction here," Shah added. The firm has urged proxy advisory services ISS and Glass Lewis to reconsider their current recommendations in favor of the company's proposals.