An activist hedge fund is mounting a challenge against WEX’s leadership, seeking to remove CEO Melissa Smith from the company’s board of directors during the upcoming shareholder meeting scheduled for May 5th.
Impactive Capital, which holds approximately 5% of WEX shares, is calling on other investors to vote out Smith from her board position while allowing her to continue as chief executive. The hedge fund wants to separate the dual roles of CEO and board chair that Smith currently holds, according to sources familiar with the matter and internal documents.
The investment firm is targeting three board members total, including Smith, Stephen Smith, and Nancy Altobello. Impactive argues that Stephen Smith bears responsibility for increasing executive pay packages, while it faults Altobello for permitting the CEO to maintain her board chairmanship despite what the fund considers underwhelming performance.
Impactive’s criticism centers on WEX’s stock performance since Smith assumed the board chair role in September 2019. The hedge fund contends that shares have underperformed against key rivals Corpay and HealthEquity, as well as the broader S&P Mid-Cap Index during this timeframe.
The company’s market capitalization, currently valued at $5.5 billion, has dropped by half since 2019, resulting in $3.4 billion in lost shareholder value, according to Impactive’s analysis. However, WEX stock has gained 28% over the past year.
WEX operates primarily in fleet management services, corporate payment solutions, and employee benefit programs. The company previously indicated it has reviewed Impactive’s suggestions regarding strategic direction, capital distribution, and board makeup.
A WEX spokesperson did not provide immediate comment when contacted.
The activist investor is proposing three replacement candidates: technology and payments specialist Kurt Adams, financial services veteran Ellen Alemany, and Lauren Taylor Wolfe, who co-founded Impactive Capital.
This proxy battle has been developing for months and is anticipated to be among this year’s most contentious shareholder disputes. Impactive points to declining confidence in Smith’s leadership, noting that she received support from only 64.3% of shareholders in the most recent vote, a significant drop from the 97.7% backing she received in 2024.
WEX operates WEX Bank, a Utah-chartered industrial bank, which subjects the company to oversight by the Federal Deposit Insurance Corporation and Utah’s Department of Financial Institutions. Last month, WEX suggested in regulatory documents that Impactive might face regulatory hurdles related to FDIC and state requirements for proxy contests.
However, Impactive states it has addressed regulators’ questions and has not received additional inquiries from either oversight body.
