\nWisdomTree, Inc. (NYSE: WT) (\u201cWisdomTree\u201d or the \u201cCompany\u201d), a global financial innovator, today issued the following letter to its stockholders in connection with WisdomTree\u2019s 2023 Annual Meeting of Stockholders (\u201c2023 Annual Meeting\u201d), which is scheduled to be held on June 16, 2023. The letter can also be found here<\/a>.<\/p>\n
\nFellow WisdomTree stockholders:<\/p>\n
\nThis letter may be the last time we write to you in connection with the 2023 Annual Meeting of Stockholders (\u201c2023 Annual Meeting\u201d), which will be held on June 16. By this point you have heard a great deal from us about WisdomTree\u2019s performance and growth strategy<\/a> and how we are creating value for our stockholders; our concerns<\/a> regarding Bruce Aust, Tonia Pankopf and Graham Tuckwell, the three nominees proposed by ETFS Capital Limited (\u201cETFS Capital\u201d); and the reasons<\/a> why the Board\u2019s six nominees are the most qualified to oversee the continued growth and transformation of your Company.<\/p>\n \nIf you don\u2019t wish to read even another page, please just read this:<\/p>\n \nIf you\u2019re willing to read just a few more pages, we want to address several key points where we believe ETFS Capital has attempted to create confusion about our Board, strategy and performance. Please note that permission to use quotations in this letter was neither sought nor obtained.<\/p>\n OUR BOARD IS REFRESHED, DIVERSE AND WELL-QUALIFIED <\/i>\u2013 WE CANNOT AFFORD TO LOSE THE VITAL SKILLS AND KNOWLEDGE OF DIRECTORS FRANK SALERNO AND WIN NEUGER.<\/i><\/b><\/p>\n \nOur commitment to Board refreshment and diversity is real and demonstrable. Over the past two years, we have added five new, independent directors<\/b>, all of them diverse, and who collectively constitute a majority of the Board. Two leading independent proxy advisory firms, Institutional Shareholder Services (\u201cISS\u201d) and Glass Lewis, recently affirmed our corporate governance enhancements, with ISS confirming in its report last week that \u201cthe company\u2019s corporate governance and board composition have improved over the past two years.\u201d<\/p>\n \nIf there has been a silver lining to ETFS Capital\u2019s unnecessary and unjustified proxy contest, it is that we have spent more time together as a Board and meeting with our stockholders. Through this intense and engaged process, we have learned more about one another, and especially about the capabilities of our newer directors. Our recent experience has made it clear that they will be able to take leadership roles on the Board more rapidly than we had expected. With this in mind, the Board has committed to rotating at least two of three committee chairs by the end of 2023.<\/span><\/b><\/p>\n \nIf ETFS Capital\u2019s nominees were to replace Mr. Salerno and Mr. Neuger, our Board would have two new directors in addition to the five who are already new to the Board. We believe that having seven of eight non-management directors on the Board with less than three years of service (and five of those having less than two years) would be disruptive and create dysfunction within the Board.<\/b> It is crucial not only that our newer directors bring their fresh perspectives, but also that we retain independent directors with institutional, longer-term knowledge and an irreplaceable understanding of WisdomTree and our industry, directors like Frank Salerno and Win Neuger.<\/p>\n Frank Salerno has decades of experience in the asset management industry, which is directly relevant to WisdomTree\u2019s core business.<\/b> He spent nearly twenty years at Bankers Trust Company, where he was involved with all aspects of the money management business. He helped Merrill Lynch start an institutional asset management business, and oversaw index funds, quantitatively managed active funds, private equity and hedge fund businesses. He became WisdomTree\u2019s first independent director in 2005 and has provided major contributions to the development of the Company\u2019s ETF business ever since, helping the Company grow from infancy, fostering an industry-leading company culture and ensuring that the Company and Board operate at the highest level of ethics and professionalism. He stands in stark contrast to the conflicted and unqualified ETFS Capital nominees.<\/p>\n Win Neuger has decades of experience in senior management positions in the asset management industry, expertise directly relevant to WisdomTree\u2019s business.<\/b> He grew AIG\u2019s global investment portfolio into a company with $753 billion in assets and oversaw the growth of significant assets at prior roles at Bankers Trust, Western Asset Management and Northwestern National Bank. From years of WisdomTree Board service he has gained a deep understanding of the Company, its business model and strategy. He has executive leadership experience and expertise in ETFs, accounting, financial reporting and corporate governance. Under his leadership of the Nominating and Governance Committee, the Company has added five new directors in just the past two years, all of whom are diverse and now constitute a majority of the Board.<\/p>\n \nBoth Mr. Neuger and Mr. Salerno possess valuable knowledge of our business model and have contributed significantly to our ETF business growth and our strategy, and also play key roles in bringing our newer directors up to speed and educating them about our Company. They each have over twenty years of experience in executive leadership roles in the asset management industry, and neither Mr. Aust nor Ms. Pankopf brings sufficient experience or skills to fill their shoes. <\/b>In fact, neither of them has any ETF experience \u2013 operational or board \u2013 even though ETFS Capital insists that our Board requires more ETF experience (which it does not).<\/p>\n OUR STRATEGY IS WORKING AND WE HAVE STRONG MOMENTUM \u2013 YOU DON\u2019T HAVE TO SIMPLY TAKE OUR WORD FOR IT<\/i><\/b>.<\/p>\n \nAfter having had months to make its case, ETFS Capital has failed to articulate a coherent, compelling alternative strategy that would create value for our stockholders. We have been transparent with our stockholders \u2013 you know our strategy and objectives, and how we plan to execute and achieve these goals. ETFS Capital wants your vote but won\u2019t tell you the ideas or concrete plan you\u2019re supposed to be voting for. <\/b>All ETFS Capital has suggested is that we retreat from our digital assets strategy and reduce our headcount, actions that would take us out of the industry-wide structural shift towards digital assets and blockchain technology, cost us valuable talent and reduce our strategic optionality for the long term.<\/p>\n \nGlass Lewis has recognized the merits of our strategy and how uniquely positioned WisdomTree is to succeed, citing WisdomTree\u2019s \u201cearly-mover advantage and market-leading position in tokenization and digital assets\u201d in addition to our \u201cinnovative product suite and a proprietary distribution channel through WisdomTree Prime.\u201d Glass Lewis also noted that ETFS Capital\u2019s \u201ccalls to shutter or abandon these initiatives are premature\u201d and concluded that, \u201cultimately, we find management\u2019s articulated vision for WisdomTree and the early results it has achieved to be more compelling than the Dissident\u2019s plan.\u201d<\/b><\/p>\n Our Board and management team have created value for stockholders, as demonstrated by our top-performing TSR relative to peers on the YTD-, 1-, and 3-year time horizons.<\/i><\/b><\/p>\n \nBy employing cherry-picked numbers and sensationalistic headlines, ETFS Capital attempts to create the impression that our management caused value erosion in our stock. In addition, ETFS Capital is particularly critical of our TSR over a 5-year time horizon, but as was clearly and publicly documented at the time, that primarily resulted from the decrease in our PE multiple when we acquired the European asset management business of Mr. Tuckwell\u2019s company, ETF Securities, in 2018.<\/p>\n \nWhile ETFS Capital would like to take credit for our recent performance, we believe it is the market that is recognizing our momentum and the potential upside of our strategy, including our digital assets strategy specifically. Earlier this year, one reputable analyst upgraded our stock to \u201cBuy,\u201d noting that it was \u201cbased on the firm\u2019s effective product diversification and consistently strong net inflows.\u201d More recently, Oppenheimer initiated coverage of WisdomTree, noting that they \u201cbelieve the stock is moderately undervalued against its near-term earnings momentum\u201d and that they \u201csee significant longer-term upside.\u201d The Oppenheimer analyst noted that \u201cif the strong recent AUM inflows continue, there should be considerable earnings leverage to take EPS well above consensus\u201d and that our digital assets efforts \u201ccould clearly become [financially meaningful] over time.\u201d We are proud to say that we currently have the third highest number of \u201cBuy\u201d ratings among the nine publicly traded U.S. traditional asset managers with a sub-$5 billion market cap included in our Traditional Asset Manager Peer Group.<\/p>\n \nIn addition, Phase 2 Partners, an investment firm focused on the financial services industry and a WisdomTree stockholder, recently announced<\/a> its support for the WisdomTree team, our refreshed Board and the digital initiatives it says \u201crepresent significant potential.\u201d<\/p>\n \nIn its June 6 report, Glass Lewis observed that \u201cthe investment community recognizes the positive momentum in the Company\u2019s business as well as the potential upside of its strategy, which the Dissident has in many respects refused to acknowledge\u201d and that \u201cthe Company is justified in pursuing its digital assets strategy given the potential upside and the early successes to date.\u201d Glass Lewis agreed that our \u201crecent outperformance has coincided with strong growth in AUM, near-record levels of quarterly net inflows, totaling approximately $24 billion from April 2020 to April 2023, as well as an upgrade to, and an initiation of coverage at, a \u2018buy\u2019 rating in the Company\u2019s stock.\u201d Glass Lewis continued, \u201cin our view, these factors have in large part contributed to the Company\u2019s recent outperformance, potentially to a greater extent than the Dissident\u2019s renewed campaign.\u201d<\/b><\/p>\n Our digital assets strategy is a path to long term growth and leverages our core capabilities without distracting focus from our ETF business.<\/i><\/b><\/p>\n \nETFS Capital appears to fundamentally misunderstand our digital assets strategy, and consistently misrepresents that strategy in its communications to stockholders. First and foremost, our fundamental strategy and positioning have not changed \u2013 we remain a leading and innovative provider of ETFs. We view our digital assets strategy as a natural extension of our core business, and one that leverages our core competencies and expertise.<\/b><\/p>\n \nOur investments in digital assets will help us stay competitive and outpace our peers, and these initiatives will also further diversify our revenue streams and accelerate organic growth with higher incremental margins at scale, which will ultimately generate value for our stockholders in the long term. Essentially, we see digital assets as having the potential to do to ETFs what ETFs did to mutual funds.<\/b><\/p>\n \nTo be clear, our digital assets strategy covers the gamut of tokenization and blockchain-enabled finance and is not<\/i> focused on crypto (as ETFS Capital would have you believe). Citi has suggested that tokenized securities could be a $5 trillion market by 2030, and BCG has estimated $16 trillion in the same time frame. Even BlackRock\u2019s CEO Larry Fink says that it\u2019s the \u201cnext generation for markets.\u201d<\/p>\n \nOur initial efforts have already shown progress \u2013 in 2022, the SEC declared effective the registration of our 10 digital funds, and our blockchain-native digital wallet, WisdomTree Prime\u2122, is on track for initial launch in app stores in Q2, alongside our suite of digital funds and tokens. As an early-mover, WisdomTree will play for both alpha and beta product categories. By taking calculated strategic steps, we can maintain our early-mover advantage in this greater addressable market. If we stand still, we will be left behind.<\/b><\/p>\n We are making measured investments in crucial areas for growth.<\/i><\/b><\/p>\n \nThe costs to pursue these goals are far less extravagant than the picture ETFS Capital has tried to paint. We have a measured, strategic plan for success, with a breakeven point at a fraction of the users and marketing dollar projections that ETFS Capital assumes. Last year the Operations and Strategy Committee of the Board (\u201cOSCO\u201d), which was formed at ETFS Capital\u2019s insistence and included two of its proposed directors, reviewed our expense base and agreed that further cutting expenses would harm the business, stifle growth, be disruptive and add risk to our operations<\/b>. Further, OSCO specifically reviewed our expenses with respect to our digital assets strategy and determined that our costs are reasonable and in line with our objectives.<\/p>\n \nMargin compression is not unique to WisdomTree. It is an industry-wide issue and we\u2019re taking the necessary steps to combat these challenges \u2013 by building upon our consecutive quarters of net inflows, taking advantage of market normalization, pre-positioning ourselves with digital assets and focusing our strength on areas of future growth.<\/p>\n OUR EXECUTIVE COMPENSATION PROGRAM RECEIVED SUPPORT FROM BOTH ISS AND GLASS LEWIS.<\/i><\/b><\/p>\n \nETFS Capital has tried to make an issue of our executive compensation program, the peers against which we compare ourselves for compensation purposes, and some recent changes in the wording of certain executive severance arrangements. Our executive compensation program is designed and managed by our Compensation Committee, which includes Lynn S. Blake (who was originally nominated by ETFS Capital) and other independent directors, not<\/i> our management team. The Committee engages an independent compensation consultant \u2013 FW Cook \u2013 to analyze our program and compare it to our peers. In their recent reports, ISS and Glass Lewis both recommended that stockholders vote in favor of our executive compensation proposal<\/b>, with ISS noting that \u201cpay and performance are reasonably aligned for the year in review\u201d and Glass Lewis stating that \u201cthe compensation program places a sufficient focus on performance-based compensation, and continues to align pay and performance.\u201d<\/p>\n \nRegarding recent changes to our executive severance agreements, we updated the language to align with best practices for our industry. In fact, board turnover change of control provisions like ours are in place at 94% of our peers. Notably, continued refreshment by our sitting Board, which has been ongoing since 2021, does not trigger the board turnover change of control provision, but rather it is triggered only if such refreshment is prompted by an activist and only if a majority of the Board is replaced. Even if all of ETFS Capital\u2019s nominees were to be elected at the 2023 Annual Meeting, this provision would not be triggered.<\/p>\n WE WANT TO CLEAR THE AIR ABOUT THE DIRECTORS NOMINATED LAST YEAR BY ETFS CAPITAL<\/i>.<\/b><\/p>\n \nIn 2022, Lynn S. Blake and Deborah Fuhr joined our Board as part of the Cooperation Agreement signed with ETFS Capital and its then-partner Lion Point Capital. Their tenure on the Board was taken seriously: they constituted 50% of the four-member OSCO, Ms. Blake joined our Compensation Committee, and Ms. Fuhr became a member of our Nominating and Governance Committee. Each participated in our robust new director orientation, and each had immediate access to WisdomTree\u2019s management and information about the Company.<\/p>\n \nWhen the Cooperation Agreement expired in March 2023, so did our contractual obligation to re-nominate either Ms. Fuhr or Ms. Blake. We then carefully considered all our directors to ensure that we have the right mix of skills and experience represented on our Board to oversee the future of the Company. Ms. Blake\u2019s value was clear \u2013 her 30 years at State Street, one of the world\u2019s largest asset managers, and roles in executive and strategy positions enabled her to provide valuable insight to the Board and management team, particularly related to her critical review of WisdomTree\u2019s operations and strategy as a member of OSCO. Based on the same criteria, the Board (except for Ms. Fuhr) unanimously determined not to re-nominate Ms. Fuhr, and instead nominated Shamla Naidoo, who will bring to WisdomTree deep experience in digital transformation with expertise in cybersecurity, intellectual property, information technology and data. To be clear, the Cooperation Agreement did not require WisdomTree to re-nominate ETFS Capital\u2019s directors into perpetuity,<\/b> and we evaluate every director on our Board regularly, not just those nominated by our stockholders.<\/p>\n PROTECT YOUR INVESTMENT IN WISDOMTREE TODAY, AND REJECT ALL OF ETFS CAPITAL\u2019S UNQUALIFIED CANDIDATES.<\/b><\/p>\n Both ISS and Glass Lewis endorsed Lynn S. Blake, Daniela Mielke, Shamla Naidoo and Jonathan Steinberg, and Glass Lewis also endorsed Win Neuger.<\/b>NEITHER endorsed Graham Tuckwell.<\/span> Vote on the WHITE<\/span><\/b> proxy card \u201cFOR\u201d all six <\/b>of WisdomTree\u2019s highly qualified candidates before it\u2019s too late.<\/p>\n \nSincerely,<\/p>\n \nLynn S. Blake, Anthony Bossone, Smita Conjeevaram, Daniela Mielke, Win Neuger, Frank Salerno, Harold Singleton III, Jonathan Steinberg<\/p>\n About WisdomTree<\/b><\/p>\n \nWisdomTree is a global financial innovator, offering a well-diversified suite of exchange-traded products (ETPs), models and solutions. We empower investors to shape their future and support financial professionals to better serve their clients and grow their businesses. WisdomTree is leveraging the latest financial infrastructure to create products that provide access, transparency and an enhanced user experience. Building on our heritage of innovation, we are also developing next-generation digital products and structures, including digital funds and tokenized assets, as well as our blockchain-native digital wallet, WisdomTree Prime\u2122.<\/p>\n \nWisdomTree currently has approximately $92.6 billion in assets under management globally.<\/p>\n \nWisdomTree\u00ae<\/sup> is the marketing name for WisdomTree, Inc. and its subsidiaries worldwide.<\/p>\n Cautionary Statement Regarding Forward-Looking Statements<\/b><\/p>\n \nAny statements contained in this letter that do not describe historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are identified by use of the words \u201canticipates,\u201d \u201cbelieves,\u201d \u201cestimates,\u201d \u201cexpects,\u201d \u201cintends,\u201d \u201cplans,\u201d \u201cpredicts,\u201d \u201cprojects,\u201d \u201cshould,\u201d \u201cviews,\u201d and similar expressions. Any forward-looking statements contained herein are based on current expectations, but are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including, but not limited to, the impact and contributions of the slate of director nominees WisdomTree has nominated, the effectiveness of WisdomTree\u2019s board refreshment process in identifying candidates with the set of skills to oversee WisdomTree\u2019s strategy, the ability of the candidates proposed by ETFS Capital to enhance WisdomTree\u2019s Board or enhance its strategy, and WisdomTree\u2019s ability to achieve its financial and business plans, goals and objectives and drive stockholder value, including with respect to its ability to successfully implement its strategy relating to WisdomTree Prime\u2122, its ability to continue to make achievements in total shareholder return, AUM, growth rate, levels of net inflows, analyst ratings, and stock price performance, its ability to withstand market volatility, the risk that the market for tokenized securities will not expand, and other risk factors discussed from time to time in WisdomTree\u2019s filings with the SEC, including those factors discussed under the caption \u201cRisk Factors\u201d in its most recent annual report on Form 10-K, filed with the SEC on February 28, 2023, and in subsequent reports filed with or furnished to the SEC. WisdomTree assumes no obligation and does not intend to update these forward-looking statements, except as required by law, to reflect events or circumstances occurring after today\u2019s date.<\/p>\n Important Additional Information and Where to Find It<\/b><\/p>\n \nWisdomTree filed a proxy statement on Schedule 14A, an accompanying WHITE<\/span><\/b> proxy card and other relevant documents with the SEC in connection with such solicitation of proxies from WisdomTree stockholders for WisdomTree\u2019s 2023 Annual Meeting. WISDOMTREE STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ WISDOMTREE\u2019S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), ACCOMPANYING WHITE PROXY CARD, AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION. <\/b>Investors and stockholders may obtain a copy of the definitive proxy statement, an accompanying WHITE<\/span><\/b> proxy card, any amendments or supplements to the definitive proxy statement and other documents that WisdomTree files with the SEC at no charge at the SEC\u2019s website at www.sec.gov<\/a>. Copies will also be available at no charge on WisdomTree\u2019s Investor Relations website at https:\/\/ir.wisdomtree.com\/sec-filings<\/a> or by contacting Jeremy Campbell, Head of Investor Relations, at jeremy.campbell@wisdomtree.com<\/a>, as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.<\/p>\n \nInvestors and stockholders can find out more about the proxy vote at the 2023 Annual Meeting by visiting the WisdomTree investor relations website and navigating to the page entitled \u201c2023 Annual Meeting\u201d: https:\/\/ir.wisdomtree.com\/2023-annual-meeting-proxy-vote<\/a>.<\/p>\n Disclaimer<\/b><\/p>\n \nWisdomTree has neither sought nor obtained the consent from any third party to use any statements or information contained in this letter that have been obtained or derived from statements made or published by such third parties. Any such statements or information should not be viewed as indicating the support of such third parties for the views expressed herein.<\/p>\n \nCategory: Business Update<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20230612362075\/en\/<\/a><\/span><\/p>\n \nInvestor Relations \nor<\/p>\n \nInnisfree M&A Incorporated \nor<\/p>\n \nH\/Advisors Abernathy KEYWORDS:<\/b> United States North America New York<\/p>\n INDUSTRY KEYWORDS:<\/b> Consulting Banking Professional Services Finance<\/p>\n\n
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WisdomTree, Inc.
\n
Jeremy Campbell
\n
+1.646.522.2602
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Jeremy.campbell@wisdomtree.com<\/a><\/p>\n
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Jonathan Salzberger \/ Scott Winter
\n
+1.212.750.5833
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jsalzberger@innisfreema.com<\/a> \/ swinter@innisfreema.com
\n<\/a>
Media Relations
\n
WisdomTree, Inc.
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Jessica Zaloom
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+1.917.267.3735
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jzaloom@wisdomtree.com<\/a> \/ wisdomtree@fullyvested.com<\/a><\/p>\n
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Jeremy Jacobs \/ Dana Gorman
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+1.202.774.5600 \/ +1.212.371.5999
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jeremy.jacobs@h-advisors.global<\/a> \/ dana.gorman@h-advisors.global<\/a><\/p>\n
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