After greater than a 12 months of public exchanges concerning the strategic route of Enhabit Inc. (NYSE: EHAB), the corporate's shareholders have voted to elect an activist, investor-approved candidate to the board of administrators.

At Enhabit's annual shareholders assembly on Thursday, the corporate's shareholders voted to elect eight of Enhabit's director nominees, in addition to Mark W. Ohlendorf, a nominee nominated by activist investor AREX Capital.

Present Enhabit CEO Barb Jacobsmeyer was additionally among the many nominees.

New York-based hedge fund AREX Capital owns 4.9% of Enhabit's frequent inventory. The hedge fund has been brazenly essential of Enhabit's route as an organization.

AREX Capital particularly spoke out in opposition to the choice of the corporate's board of administrators to stay an unbiased publicly traded firm and to not pursue a sale or merger, following a strategic assessment.

“We’re upset that Enhabit's strategic assessment course of concluded with no sale of the enterprise,” AREX Capital wrote in a Could press launch. “We don’t consider this failure displays Enhabit's intrinsic worth or strategic potential. Reasonably, this failure lies with Enhabit's board of administrators.”

On the finish of Could, AREX Capital printed a letter reiterating the issues with Enhabit's board of administrators.

“We consider the board must be clear {that a} vital reshuffling of the membership is important and warranted,” the hedge fund wrote. “A board that has presided over a 60% decline within the firm's inventory worth over a two-year interval ought to, in our view, have the humility to acknowledge that it can not and shouldn’t stay in its present type.”

Jacobsmeyer spoke about this letter throughout her look on the Leerink Companions Healthcare Crossroads convention in Could.

“We’ve a robust, very skilled board of administrators that has helped us navigate these waters over the previous few years,” she mentioned. “We’re actually assured sooner or later and within the management of our board.”

In June, Enhabit once more defended itself forward of the annual shareholders assembly.

“AREX's public statements comprise quite a few misrepresentations, selectively chosen time durations, and deceptive statements, which we are going to deal with in future communications,” Enhabit wrote. “Nonetheless, we wholeheartedly agree with AREX that 'the one factor that issues now’s placing the corporate on a path that may unlock Enhabit's substantial worth for all shareholders.'”

That very same month, AREX Capital printed a six-page letter in response.

“The previous two years have been difficult for the house care and hospice industries, however Enhabit's friends have demonstrated that they will navigate these challenges with out materially decreasing their profitability. Whereas friends had been catching colds, Enhabit was coming down with pneumonia,” AREX Capital wrote. “We consider Enhabit's vital underperformance relative to friends is a direct results of the Board not having the mandatory business experience to carry administration accountable.”

In July, Institutional Shareholder Companies (ISS), an unbiased proxy advisory agency, endorsed AREX Capital and suggested shareholders to vote for 3 of AREX Capital's nominees.

These nominees had been Anna-Gene O'Neal, former president of Brookdale Senior Residing's (NYSE: BKD) healthcare providers division, Mark W. Ohlendorf, former CFO of Brookdale, and Dr. Gregory S. Sheff, former president of house options at Humana Inc. (NYSE: HUM).

“We’re happy {that a} main unbiased proxy advisory agency has acknowledged the dearth of house well being and hospice business experience on Enhabit’s board of administrators and validated our case for significant change within the boardroom by recommending that shareholders vote for Anna-Gene O’Neal, Mark W. Ohlendorf and Dr. Gregory S. Sheff on the upcoming annual assembly,” AREX Companions mentioned in a press launch on the time. “We additionally admire that ISS has acknowledged that shareholders could want to add a direct shareholder voice to the board by voting for James T. Corcoran.”

It has certainly been a bumpy highway to Enhabit’s annual shareholders assembly. One that isn’t fairly over but. The unbiased inspector of elections has but to certify the outcomes of the votes.

As soon as the votes are full, the administrators can be given a one-year time period, expiring in 2025.

All in all, Enhabit managed to keep away from a takeover of its board. On the identical time, AREX Capital managed to make a dent with not less than certainly one of its board nominations.