Shares of Corona parent company Constellation Brands Inc. (STZ) rose by 3% in after-hours trading on Tuesday as the alcoholic beverage company announced plans to appoint two new independent directors to its board. The decision comes as part of an agreement between Constellation and investment firm Elliott Investment Management.
Expanding the Board
In accordance with the agreement, Constellation has expanded the size of its board to 13 members. The newly appointed directors are William T. Giles, the former CFO of AutoZone Inc. (AZO), and Luca Zaramella, the CFO of Oreo maker Mondelez International (MDLZ). They will serve on the board until Constellation’s 2024 annual shareholder meeting.
Maintaining Independence and Flexibility
During this time, Constellation has committed to limiting the size of its board to 13 members. However, there is still the possibility of adding one more director who meets specific independence requirements and is a current or former CEO of a publicly-traded company.
Sharing Confidential Information
Constellation also agreed to share “certain confidential information” with Elliott ahead of a company investor day later this year. This information-sharing pact aims to facilitate collaboration between the two parties.
Recognizing Untapped Potential
Elliott Investment Management expressed confidence in Constellation’s executive team and highlighted the company’s significant growth potential, which they believe is not adequately reflected in its current stock price.
As Constellation Brands Inc. takes strategic steps towards strengthening its board and fostering collaboration with Elliott Investment Management, investors are keeping a close watch on the company’s promising future in the alcoholic beverage industry.