Bradley L. Radoff Issues Letter to Enviri’s Board of Directors Regarding the Need for Meaningful and Urgent Change

Rhea-AI Summary

Bradley L. Radoff, a significant stakeholder in Enviri (NYSE: NVRI), has issued an open letter to the company's Board of Directors demanding immediate governance changes to address prolonged value destruction. The letter criticizes the Board's recent refreshment plan as insufficient and calls for three specific actions:

1. Replace three long-serving directors (David C. Everitt, James F. Earl, and Phillip C. Widman) with new independent directors
2. Separate the Chairman and CEO roles currently held by F. Nicholas Grasberger III
3. Consider all alternatives for the underperforming Harsco Rail segment

The letter highlights significant underperformance, with NVRI showing negative returns: -39.4% (3-year), -37.3% (5-year), and -59.7% during CEO tenure, compared to substantial positive returns for industry benchmarks. Radoff threatens to vote against all incumbent directors at the 2025 Annual Meeting if changes are not implemented.

Positive

• None.

Negative

• Stock severely underperformed with -59.7% return during CEO tenure vs +265.7% for S&P 600 Industrial Sector
• Rail segment continues to underperform and drag down company earnings
• Failed attempt to sell Rail Segment despite 'strong interest from many potential buyers'
• Combined Chairman/CEO structure hindering accountability
• Board's recent refreshment plan deemed insufficient for necessary changes

HOUSTON--(BUSINESS WIRE)-- Bradley L. Radoff, who collectively with his affiliates owns a significant equity stake in Enviri Corporation (NYSE: NVRI) ("Enviri" or the "Company"), today issued the below open letter to the Company’s Board of Directors (the “Board”) regarding the need for immediate leadership and structural changes following a prolonged period of negative returns and underperformance.

***

Enviri Corporation
Two Logan Square
100-120 North 18^th Street, 17^th Floor
Philadelphia, PA 19103
Attention: The Board of Directors

Members of the Board,

I am a stockholder of Enviri, with strong conviction that the Company needs to make immediate governance changes to end what has been a generation of value destruction. The Board’s recently announced “refreshment plan” falls well short of the necessary level of change but also what is dictated by best practices. Specifically, it does not address the issues posed by Enviri’s combined Chairman and CEO structure and lacks important details, including the identities of the directors who would step off the Board.¹

I am calling on you to take immediate action to:

1. Replace Independent Lead Director David C. Everitt, director James F. Earl and director Phillip C. Widman with new, independent directors who possess relevant qualifications.

The Company’s January 21^st announcement did not make clear which directors would not be standing for re-election in 2025 and 2026. Based on a review of the Company’s Corporate Governance Principles, I assume Mr. Everitt will retire at the 2025 Annual Meeting of Stockholders considering his age. I note that Mr. Everitt, Mr. Earl and Mr. Widman have each served on the Board for more than 14, 12 and 10 years, respectively, and have presided over the indefensible stock price declines and underperformance highlighted below.

To be clear, I am advocating for the Board to remain capped at nine directors given that the Company’s recent refreshment plan appears to allow the size of the Board to increase, at least temporarily. Any additions to the Board must include the simultaneous removal of long tenured, underperforming incumbent directors.

TOTAL STOCKHOLDER RETURNS: 1-, 3-, 5-YEAR AND CEO TENURE
	1-Year	3-Year	5-Year	CEO Tenure
Enviri	3.8%	-39.4%	-37.3%	-59.7%
S&P 600 Industrial Sector Index	21.6%	62.7%	104.2%	265.7%
Russell 2000 Index	15.1%	21.1%	47.8%	135.7%
Source Bloomberg. Total stockholder return data as of 1/29/2025.

TOTAL STOCKHOLDER RETURNS: DIRECTOR TENURE
	Everitt (14+ Years)	Earl (12+ Years)	Grasberger & Widman (10+ Years)	Purvis (6+ Years)	Haznedar (6+ Years)	Quinn (3+ Years)	Laurion (1+ Years)	O'Mara (1+ Years)
Enviri	-50.3%	-45.0%	-57.2%	-42.5%	-61.9%	-45.2%	16.3%	4.6%
S&P 600 Industrial Sector Index	528.7%	480.1%	248.8%	138.0%	127.5%	55.7%	43.6%	40.2%
Russell 2000 Index	296.1%	252.0%	135.3%	67.5%	61.2%	9.7%	24.2%	24.6%
Source Bloomberg. Total stockholder return data as of 1/29/2025.

2. Separate the roles of Chairman and CEO to strengthen the Board’s oversight of management.

The combined Chairman and CEO position at Enviri has failed to serve the best interests of stockholders and has hindered accountability at the top level, as evidenced by Chairman and CEO F. Nicholas Grasberger III receiving tens of millions of dollars in total compensation during an approximately 11-year period in which the Company posted an unacceptable -59.7% total stockholder return.

Under Mr. Everitt, who has served as Independent Lead Director since 2018, Enviri has posted a -50.3% total return since he joined the Board nearly 15 years ago. I believe having an independent Chair will enhance the Board’s oversight capabilities and increase accountability within the leadership structure. A strengthened Board can also begin preparing a credible succession plan for Mr. Grasberger, who has served as Chairman since 2018 and as a director and CEO since 2014.

3. Consider all alternatives for Harsco Rail (the “Rail Segment”), which should have been divested several years ago.

Based on a review of the Company’s financial results, governance policies and recent commentary, it appears that Enviri is being dragged down by its underperforming rail business. The Board has allowed Mr. Grasberger, who inexplicably holds his dual role in contravention of good governance, to botch a sale of the Rail Segment despite “strong interest from many potential buyers.”² It has now been more than four years since the Company first announced it was exploring strategic alternatives for the rail business, yet the segment continues to hold back the Company’s earnings potential. Considering the Rail Segment’s disappointing results and misalignment with the Company’s long-term strategy, it is clear that Mr. Earl’s background in the industry has not been advantageous to Enviri during his more than 12-year tenure and is no longer needed.

The Board should commit to creating a more focused environmental solutions company. A simple analysis would indicate there is more upside from being valued as an environmental services company than there is from attempting a rail turnaround. Additionally, there should be alternatives that would allow the Company to retain some upside while focusing on the future core business.

In order to advance this long-overdue strategic overhaul, I urge the Board to promptly initiate these important leadership and structural changes. The Company’s overwhelmingly poor results under existing leadership speak for themselves. In fact, every single one of you has overseen significant underperformance versus the Company’s relevant benchmark indices during your respective tenures on the Board. Despite what may be your best efforts and intentions, this level of value destruction cannot be reversed for stockholders.

Considering the fact that a majority of the Board has been in place for more than five years, I do not understand the need for such a prolonged period between today and the 2026 Annual Meeting of Stockholders, when the refreshment of two directors is expected to be completed. Surely, any potential concerns regarding Board continuity or the retention of institutional knowledge are irrelevant here. I suspect many stockholders would welcome the kind of changes and sense of urgency I am advocating for, considering the significant value that has been wiped out under long-tenured leadership. The Board must not rest on its laurels after reaching an insufficient cooperation agreement with Neuberger Berman Group LLC.

In closing, I believe Enviri has significant potential – but the Company has been held back for too long by a culture devoid of accountability and an underperforming rail business. The Board should understand that stockholders cannot weather this degree of underperformance and value destruction much longer. Serious changes are urgently needed to fix the Company’s leadership, governance and strategy, and set Enviri on the path toward value creation. I am available to speak with the Board in the coming weeks regarding the concerns and ideas I have laid out in this letter. Absent the changes outlined above, I intend to vote my shares against all incumbent directors at the 2025 Annual Meeting of Stockholders this spring.

Sincerely,

Bradley L. Radoff

________________________
¹ Company’s press release and Form 8-K dated 1/21/2025.
² Company’s Q1 2024 earnings call transcript dated 5/2/2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250130999310/en/

Greg Lempel

greg@fondrenlp.com

Source: On Behalf of Bradley L. Radoff

FAQ

What are the main changes demanded by Bradley Radoff for Enviri (NVRI)?

Bradley Radoff demands three main changes: 1) Replace three long-serving directors with new independent directors, 2) Separate the Chairman and CEO roles, and 3) Consider strategic alternatives for the Harsco Rail segment.

How has Enviri (NVRI) stock performed compared to its benchmarks?

NVRI has significantly underperformed, showing returns of -39.4% (3-year), -37.3% (5-year), and -59.7% during CEO tenure, while the S&P 600 Industrial Sector Index showed +62.7%, +104.2%, and +265.7% respectively.

Which Enviri (NVRI) directors are targeted for replacement in Radoff's letter?

Radoff calls for the replacement of David C. Everitt (Lead Director), James F. Earl, and Phillip C. Widman, who have served on the board for more than 14, 12, and 10 years respectively.

What is the issue with Enviri's (NVRI) Rail Segment according to Radoff?

According to Radoff, the Rail Segment is underperforming and dragging down company earnings. Despite announced plans to explore strategic alternatives four years ago and strong buyer interest, the company has failed to divest the segment.