H Partners Sends Letter to Tempur Sealy Shareholders

Apr 17 2015 | 9:28am ET

H Partners Management has sent a letter to shareholders of Tempur Sealy urging them to vote against the re-election of company CEO Mark Sarvary.

As the company's largest shareholder with a 10% stake in the firm, H Partners has been pressing for changes ahead of the company's annual meeting on May 8. 

"Tempur Sealy possesses all the components of a successful company: industry-leading products, iconic brands that have stood the test of time, and a talented team of dedicated employees," the letter said. "However, despite these positive attributes, we believe the Company’s stock is significantly undervalued due to mismanagement by an entrenched and misaligned Board."

Two weeks ago, the hedge fund created a new website that outlines a number of possible changes at the mattress manufacturer.

At the center of the hedge fund’s proposals is its goal of replacing Savary with what it calls a “capable CEO.”

The firm reiterated its position against Savary in the letter today by highlighing that "the Board has paid the CEO $18 million to oversee a $1.6 billion loss in equity value and 140% underperformance versus the Company’s peers."

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