SES shrinks board as shareholder calls for bigger changes

TAMPA, Fla. — SES has outlined plans for a more streamlined board of directors, but one of the satellite operator’s biggest shareholders says the changes don’t go far enough amid mounting competition in the space industry.

The Luxembourg-based company said it has decided to reduce its board from 11 to nine members while proposing two new directors with extensive U.S. national security and defense leadership experience:

• Ellen Lord, former Under Secretary of Defense for Acquisition and Sustainment of the United States Department of Defense.

• John Shaw, former Deputy Commander of the U.S. Space Force and first Commander of the USSF Space Operations Command and Combined Forces Space Component Command.

These appointments will help SES “effectively navigate this rapidly changing landscape,” the company said, and will be put to a vote at its next annual shareholder meeting April 3.

SES also kicked off a search for a director with capital markets experience after hedge fund Appaloosa called for an overhaul of its share capital and board structure.

Appaloosa holds more than 7% of SES’ economic interests and has a similar stake in Intelsat, which SES is acquiring in a $3.1 billion deal.

While SES said it would put Appaloosa’s proposal for a structured program to distribute capital to shareholders to a vote — despite recommending its rejection — the operator dismissed other proposals from the hedge fund, such as reducing state control.

“The initial steps the SES Board is taking to modernize its structure are long-overdue and only came following shareholder pressure,” Appaloosa said in a statement.

“However, much more can, and must, be done — with a greater sense of urgency than is evident from the Board’s incrementalism.”

Appaloosa urged other shareholders to vote in favor of its plan to return excess cash flow to shareholders annually.

SES said it already strikes a healthy balance between returning capital to shareholders and maintaining flexibility for growth investments, warning that Appaloosa’s proposal could jeopardize its investment-grade credit rating.

Luxembourg has been an anchor shareholder since the company’s inception, SES noted, and the government’s special Class B shares cannot be taken away by a vote of other shareholders.

“In any event, SES considers the Luxembourg Government to be a valuable shareholder and stakeholder in the Company and the Luxembourg Government has on numerous occasions confirmed its strong support for the Company,” SES said.

SES added that the government is unable to appoint more than a third of its total number of board directors, preventing it from dictating or inhibiting the company’s growth strategy.

Appaloosa had also called on SES to remove its entire board and replace it with a smaller number of directors, which SES said would be chaotic and unnecessary.