Bath & Body Works looks like it could have a battle on its hands. Activist investor Dan Loeb’s Third Point hedge fund plans to launch a proxy fight against the company to address concerns regarding executive compensation, succession planning and the company’s weak financial performance. 

Among Loeb’s complaints, is the nearly $18 million pay package Sarah Nash received for taking on a new role as executive chair and interim CEO in May 2022, noting the payment came on top of the $700,000 she was already receiving annually to serve as board chair. 

New York-based Third Point, which owns approximately 6% in the specialty retailer and is its fourth largest holding, plans to nominate candidates to the board, including a shareholder representative. 

“As fiduciaries, we have no choice but to put forth qualified director candidates and give our fellow shareholders the opportunity to elect directors who can hold the stewards of their capital responsible for the decisions they make,” wrote Loeb in a letter to the company’s board. 

“The Board strongly disagrees with the views expressed in Third Point’s letter,” responded Central Ohio-based Bath & Body Works. However, it said it would review and consider Third Point’s proposed board nominations. 

The firm first raised concerns in a November 30 Securities & Exchange Commission filing and said it has had private discussions with both Nash and CEO Gina Boswell, who was named to the position in November. The firm decided to go public with its issues after a Third Point-recommended candidate was not added to the board. 

Third Point recommended two board candidates: Lucy Brady, a Conagra Brands executive who was appointed earlier this month, and a second unnamed person whom the board did not select. Bath & Body Works instead chose Steve Voskuil, CFO of The Hershey Co., who was added this week.