The Urgent Case for Replacing Three Long-Tenured
Members of Hasbro's 13-Member Board
May 2022
www.StrengthenHasbro.com
1
Disclaimer
•
The materials contained herein (the “Materials”) represent the opinions of Alta Fox Opportunities Fund, LP and the other participants named in this proxy solicitation (collectively, “Alta Fox”) and are
based on publicly available information with respect to Hasbro, Inc. (the “Company”). Alta Fox recognizes that there may be confidential information in the possession of the Company that could lead it or
others to disagree with Alta Fox’s conclusions. Alta Fox reserves the right to change any of its opinions expressed herein at any time as it deems appropriate and disclaims any obligation to notify the market
or any other party of any such changes. Alta Fox disclaims any obligation to update the information or opinions contained herein. Certain financial projections and statements made herein have been derived
or obtained from filings made with the Securities and Exchange Commission (“SEC”) or other regulatory authorities and from other third party reports. There is no assurance or guarantee with respect to the
prices at which any securities of the Company will trade, and such securities may not trade at prices that may be implied herein. The estimates, projections and potential impact of the opportunities identified
by Alta Fox herein are based on assumptions that Alta Fox believes to be reasonable as of the date of the Materials, but there can be no assurance or guarantee that actual results or performance of the
Company will not differ, and such differences may be material. The Materials are provided merely as information and are not intended to be, nor should they be construed as, an offer to sell or a solicitation of
an offer to buy any security.
•
Certain members of Alta Fox currently beneficially own, and/or have an economic interest in, securities of the Company. It is possible that there will be developments in the future (including changes
in price of the Company’s securities) that cause one or more members of Alta Fox from time to time to sell all or a portion of their holdings of the Company in open market transactions or otherwise
(including via short sales), buy additional securities (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls or other derivative instruments relating to some or all of
such securities. To the extent that Alta Fox discloses information about its position or economic interest in the securities of the Company in the Materials, it is subject to change and Alta Fox expressly
disclaims any obligation to update such information.
•
The Materials contain forward-looking statements. All statements contained herein that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the
words “anticipate,” “believe,” “expect,” “potential,” “opportunity,” “estimate,” “plan,” “may,” “will,” “projects,” “targets,” “forecasts,” “seeks,” “could,” and similar expressions are generally intended to
identify forward-looking statements. The projected results and statements contained herein that are not historical facts are based on current expectations, speak only as of the date of the Materials and involve
risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such
projected results and statements. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business
decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Alta Fox. Although Alta Fox believes that the assumptions underlying the projected results
or forward-looking statements are reasonable as of the date of the Materials, any of the assumptions could be inaccurate and therefore, there can be no assurance that the projected results or forward-looking
statements included herein will prove to be accurate. In light of the significant uncertainties inherent in the projected results and forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation as to future results or that the objectives and strategic initiatives expressed or implied by such projected results and forward-looking statements will be achieved. Alta
Fox will not undertake and specifically declines any obligation to disclose the results of any revisions that may be made to any projected results or forward-looking statements herein to reflect events or
circumstances after the date of such projected results or statements or to reflect the occurrence of anticipated or unanticipated events.
•
Unless otherwise indicated herein, Alta Fox has not sought or obtained consent from any third party to use any statements, photos or information indicated herein as having been obtained or derived
from statements made or published by third parties. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed herein. No warranty is made
as to the accuracy of data or information obtained or derived from filings made with the SEC by the Company or from any third-party source. All trade names, trademarks, service marks, and logos herein are
the property of their respective owners who retain all proprietary rights over their use.
2
Today’s Agenda
Introduction
Executive Summary
The Case for Boardroom Change
Persistent Strategic Missteps Driving Significant Underperformance
Lack of Relevant Board Skills Hampering Effective Oversight
Our Solution: Highly Qualified, Independent Nominees
Appendix
3
Why We Are Here: It Is the Right Time to Refresh Hasbro’s Board
Hasbro is a global play and entertainment conglomerate ™‹–Š –Š”‡‡ †‹•–‹ – •‡‰‡–• ƒ† ƒ ˆ‹”•–Ǧ–‹‡ –Šƒ– ™ƒ• ”‡ ‡–Ž› ’”‘‘–‡† ˆ”‘ ™‹–Š‹ „› –Š‡ —””‡– ‘ƒ”†Ǥ
Alta Fox, which has a ~2.5% stake in Hasbro, is a top 10 shareholder –Šƒ– „‡Ž‹‡˜‡• –Š‡ ‘’ƒ›
Šƒ• ‡š ‡’–‹‘ƒŽ „”ƒ†•ǡ —•–‘‡”•ǡ ‡’Ž‘›‡‡• ƒ† Ž‘‰Ǧ–‡” ’‘–‡–‹ƒŽǤ
Hasbro is currently lagging peers, losing market share and trading at a steep discount †—‡ –‘ǡ ‹
‘—” ˜‹‡™ǡ –Š‡ —””‡– ‘ƒ”†ǯ• †‡ ‹•‹‘• ™‹–Š ”‡•’‡ – –‘ ƒ’‹–ƒŽ ƒŽŽ‘ ƒ–‹‘ǡ ‘”’‘”ƒ–‡ ‰‘˜‡”ƒ ‡ǡ
‹˜‡•–‘” ‘—‹ ƒ–‹‘ǡ Ž‡ƒ†‡”•Š‹’ ‘’‡•ƒ–‹‘ ƒ† •–”ƒ–‡‰‹ ’Žƒ‹‰Ǥ
Hasbro has unfortunately been underperforming peers and relevant indices in terms of total
shareholder returns for many years —†‡”–Š‡Ž‘‰Ǧ–‡—”‡††‹”‡ –‘”•™‡™ƒ––‘”‡’Žƒ ‡Ǥ
With a properly refreshed Board and properly incentivized management teamǡ ™‡ •‡‡ ƒ Ž‡ƒ”
’ƒ–Š –‘ ƒ Š‹‡˜‹‰ ‰‘˜‡”ƒ ‡ ƒ† ‘’‡”ƒ–‹‘ƒŽ ‹’”‘˜‡‡–• –Šƒ– ƒ †”‹˜‡ Ž‘‰Ǧ–‡” ˜ƒŽ—‡Ǥ
We have engaged with the current Board –‘ ”‡ƒ Š ƒ •‡––Ž‡‡– –Šƒ– ƒ „‡‡ˆ‹– ƒŽŽ •–ƒ‡Š‘Ž†‡”•Ǥ
ˆ‘”–—ƒ–‡Ž›ǡ Ž‘‰Ǧ–‡—”‡† ‹ —„‡–• ƒ’’‡ƒ” —™‹ŽŽ‹‰ –‘ ‘‹– –‘ ƒ –”—‡ ”‡ˆ”‡•Š ƒ† ”‡ ‡–Ž›
‹‹–‹ƒ–‡† ƒ †‡ˆ‡•‹˜‡ ‡š’ƒ•‹‘ ‘ˆ –Š‡ ‘ƒ”† ˆ”‘ ͳͳ ‡„‡”• –‘ ͳ͵ ‡„‡”•Ǥ
4
What This Contest Is About : The Urgent Need for a Credible Board Refresh
Before Insular Governance Permanently Impairs Value
•
What This Contest Is NOT About
What This Contest IS About
This is NOT about Hasbro’s previous CEO or the new CEO.
This IS about holding the Board and three long-tenured directors accountable for
severe underperformance before an iconic American company erodes further.
‡ „‡Ž‹‡˜‡ ƒ•„”‘ǯ• ‘ƒ”†ǦŽ‡˜‡Ž ’”‘„Ž‡• –”ƒ• ‡† ƒ› ‘‡ ‹†‹˜‹†—ƒŽǤ
This is NOT about Alta Fox.
•
ƒ•„”‘ Šƒ• ƒ––‡’–‡† –‘ Šƒ”ƒ –‡”‹œ‡ Ž–ƒ ‘š ƒ• ƒ DzˆŽ› „› ‹‰Š–dz ƒ –‹˜‹•–
—•‹‰ –Š‹• ˆ‘” „”ƒ†Ǧƒ‡ ’—”’‘•‡•Ǥ
•
 –Š‡ ‘–”ƒ”›ǡ Ž–ƒ ‘š Šƒ• ƒ •–”‘‰ –”ƒ  ”‡ ‘”† ‘ˆ ‘ŽŽƒ„‘”ƒ–‹‰ ™‹–Š
’‘”–ˆ‘Ž‹‘ ‘’ƒ‹‡• ƒ† –Š‘—‰Š–ˆ—ŽŽ› –ƒ‹‰ ƒ ‘”‡ ƒ –‹˜‡ ƒ’’”‘ƒ Š ™Š‡
™ƒ””ƒ–‡† ‘ „‡ŠƒŽˆ ‘ˆ ƒŽŽ •Šƒ”‡Š‘Ž†‡”•Ǥ
˜‡” –Š‡ ‘—”•‡ ‘ˆ –Š‹• ƒ’ƒ‹‰ǡ ™‡ Šƒ˜‡ „‡‡ ‡ ‘—”ƒ‰‡† „› –Š‡ •—’’‘”–
™‡ Šƒ˜‡ ”‡ ‡‹˜‡† ˆ”‘ ‘—” ˆ‡ŽŽ‘™ ƒ•„”‘ •Šƒ”‡Š‘Ž†‡”•ǡ ™Š‹ Š ‹ Ž—†‡† Ͷ͵Ͳ
„ƒ•‹• ’‘‹–• ‘ˆ ‘—–’‡”ˆ‘”ƒ ‡ ‘ –Š‡ †ƒ› ™‡ ’—„Ž‹ Ž› Žƒ— Š‡† ‘—”
’Žƒ–ˆ‘” ˆ‘” Šƒ‰‡Ǥ
•
•
Š‡ ‘’ƒ›ǯ• •‡ƒ” ƒ’ƒ‹‰ ƒ‰ƒ‹•– Ž–ƒ ‘š ƒ† ‘‘” ƒŽ‡› •Š‘™
ƒ•„”‘ǯ• —™‹ŽŽ‹‰‡•• –‘ †‡„ƒ–‡ –Š‡ ‘”‡ ‡”‹–• ‘ˆ –Š‹• ƒ’ƒ‹‰Ǥ
This is NOT even about whether shareholder value is maximized with
Wizards of the Coast (“WOTC”) inside or outside of Hasbro.
•
‡ ‹†‡–‹ˆ‹‡† –Š‡ ˜ƒŽ—‡ ‘ˆ –Š‡ „—•‹‡••ǡ ™Š‹ Š Šƒ† „‡‡ ‘„• —”‡† –‘
–Š‡ ’—„Ž‹ ƒ”‡–•Ǥ – –Š‡ –‹‡ǡ ™‡ ‡ ‘—”ƒ‰‡† –Š‡ ‘ƒ”† –‘ ‘„Œ‡ –‹˜‡Ž›
‡šƒ‹‡ –Š‡ ‡”‹–• ‘ˆ ƒ •’‹Ǧ‘ˆˆǤ
•
—” ‹†‡’‡†‡– ‘‹‡‡• ƒ‘– ˆ—ŽŽ› ƒ••‡•• –Š‡ „‡•– ’ƒ–Š –‘ ”‡ƒ–‹‰
Ž‘‰Ǧ–‡” •Šƒ”‡Š‘Ž†‡” ˜ƒŽ—‡ ™‹–Š‘—– „‡‹‰ ‹ –Š‡ „‘ƒ”†”‘‘ǡ „—– –Š‡
‘’ƒ›ǯ• •™‹ˆ– †‹•‹••ƒŽ ‘ˆ ‘—” •—‰‰‡•–‹‘ ˆ‘” —Ž‘ ‹‰ ˜ƒŽ—‡ ‘ „‡ŠƒŽˆ
‘ˆ ƒŽŽ •Šƒ”‡Š‘Ž†‡”• •—‰‰‡•–• ‹– ™ƒ• ‘– •‡”‹‘—•Ž› ‘•‹†‡”‡†Ǥ
•
ƒ•„”‘ǯ• •–‘  Šƒ• ‡š’‡”‹‡ ‡† ƒ •‹‰‹ˆ‹ ƒ– †‡ Ž‹‡ ‘˜‡” –Š‡ ’ƒ•– ‘‡ǡ –Š”‡‡ ƒ†
ˆ‹˜‡ ›‡ƒ”•ǡ —†‡”’‡”ˆ‘”‹‰ –Š‡ Ƭ ͷͲͲ „› ‡ƒ”Ž› ͳͲͲΨ ‘˜‡” –Š‡ Žƒ•– ˆ‹˜‡ ›‡ƒ”•Ǥ
•
ƒ•„”‘ Šƒ• ‡†‡† •‹‰‹ˆ‹ ƒ– ƒ”‡– •Šƒ”‡ ‹ –Š‡ –‘› ‹†—•–”› ‘˜‡” –Š‡ Žƒ•– †‡ ƒ†‡ǡ
‹ Ž—†‹‰ Ž‘•‹‰ ‡› ‘–”ƒ –• ƒ† „—•‹‡•• –‘ ”‹˜ƒŽ ƒ––‡ŽǤ
•
Š‡ ‘ƒ”† Šƒ• ‘˜‡”•‡‡ ’‘‘” ƒ’‹–ƒŽ ƒŽŽ‘ ƒ–‹‘ ƒ† Ƭ †‡ ‹•‹‘• †—‡ –‘ǡ ™Šƒ–
ƒ’’‡ƒ”• –‘ „‡ǡ ƒ Žƒ  ‘ˆ ˆ‹ƒ ‹ƒŽ †‹• ‹’Ž‹‡Ǥ
This IS about adding deeply-informed and objective perspectives to the Board to
improve its focus on driving sustainable value for shareholders.
•
—” †‹”‡ –‘”• ™‹ŽŽ •—’’‘”– –Š‡ ‡™ ƒ• Š‡ Šƒ”–• ƒ ‡™ ’ƒ–Šǡ „”‹‰‹‰
‹†‡’‡†‡–ǡ Š‹‰ŠŽ›Ǧ”‡Ž‡˜ƒ– ’‡”•’‡ –‹˜‡• –Šƒ– ƒ”‡ —–‡–Š‡”‡† –‘ –Š‡ ‘ƒ”†ǯ•
Š‹•–‘”‹ •–”ƒ–‡‰‹ ˆƒ‹Ž—”‡•Ǥ
This IS about holding the Board, especially long-tenured incumbents, accountable
for egregious compensation practices.
•
 –Š‡ Žƒ•– ˆ‹˜‡ ›‡ƒ”•ǡ ƒ•„”‘ ’ƒ‹† ‘—– ‘”‡ –Šƒ ̈́ʹͳͷ ‹ŽŽ‹‘ ‹ ‘’‡•ƒ–‹‘ –‘
‡š‡ —–‹˜‡• †‡•’‹–‡ ’‘‘” ’‡”ˆ‘”ƒ ‡Ǥ ‘’ƒ”‡† –‘ •‹‹Žƒ”Ž›Ǧ•‹œ‡† ‘•—‡”
‘’ƒ‹‡• ‹ ”‡ ‡– ›‡ƒ”•ǡ ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘ ‹• ƒ‘‰ –Š‡ ‘•– ‰‡‡”‘—•
†‡•’‹–‡ Šƒ˜‹‰ •‘‡ ‘ˆ –Š‡ ™‘”•– •Šƒ”‡Š‘Ž†‡” ”‡–—”•Ǥ
•
‡ ƒ”‡ •‡‡‹‰ –‘ ”‡’Žƒ ‡ „‘–Š –Š‡ Šƒ‹” ȋ‹•ƒ ‡”•ŠȌ ƒ† –Š‡ ‡šǦŠƒ‹” ȋ‡† Š‹Ž‹’Ȍ
‘ˆ ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘ ‘‹––‡‡Ǥ
5
About Alta Fox
Alta Fox is a Texas-based alternative asset management
šƒ’Ž‡•‘ˆ‘‰Ǧ‡” ˜‡•–‡–•ǣ
firm that intends to be a long-term shareholder of Hasbro.
‡‡’Ž‘›ƒŽ‘‰Ǧ–‡”Ǧˆ‘ —•‡†‹˜‡•–‡–•–”ƒ–‡‰›–‘’—”•—‡
‡š ‡’–‹‘ƒŽ”‹•Ǧƒ†Œ—•–‡†”‡–—”•ˆ‘”ƒ†‹˜‡”•‡‰”‘—’‘ˆ
‹•–‹–—–‹‘•ƒ†“—ƒŽ‹ˆ‹‡†‹†‹˜‹†—ƒŽ Ž‹‡–•Ǥ ‘—†‡†‹ʹͲͳͺǡ
Ž–ƒ ‘šˆ‘ —•‡•‘‹†‡–‹ˆ›‹‰‘ˆ–‡‘˜‡”Ž‘‘‡†ƒ†—†‡”Ǧ–Š‡Ǧ
˜‡•–‡†ǣʹͲͳͺ
Šƒ”‡’”‹ ‡+1304% •‹ ‡
‹‹–‹ƒŽ’—„Ž‹ ƒ–‹‘
˜‡•–‡†ǣʹͲͳͻ
Šƒ”‡’”‹ ‡+408% •‹ ‡
‹‹–‹ƒŽ’—„Ž‹ ƒ–‹‘
”ƒ†ƒ”‘’’‘”–—‹–‹‡•ƒ ”‘••ƒ••‡– Žƒ••‡•ǡƒ”‡– ƒ’‹–ƒŽ‹œƒ–‹‘
”ƒ‰‡•ƒ†•‡ –‘”•Ǥ
Ž–ƒ ‘šǯ•”ƒ ‡ ‘”†  ‡’–‹‘–‘ƒ–‡
˜‡•–‡†ǣʹͲʹͲ
Šƒ”‡’”‹ ‡+93% •‹ ‡
‹‹–‹ƒŽ’—„Ž‹ ƒ–‹‘
Total Shareholder Return
ƬͷͲͲ †‡š‘–ƒŽ‡–—”
Alta Fox Net Return After Fees
ͺ͵ǤͲΨ
407.1%
ƬͷͲͲ—ƒŽ‹œ‡†‡–—”
Alta Fox Annualized Net Return After Fees
ͳ͹ǤͲΨ
51.4%
Alta Fox has an excellent track record of creating value in
‘—” ‡ǣ‡–—”†ƒ–ƒˆ”‘ͶȀͳȀʹͲͳͺǦͳȀ͵ͳȀʹͲʹʹȋŽƒ•–ˆ—ŽŽ‘–Š‘ˆˆ—†”‡–—”•’”‹‘”–‘ƒ –‹˜‹•–‹˜‘Ž˜‡‡–‹ ƒ•„”‘Ȍ
All investments shown above (ǡ ǡ Ȍ are current portfolio holdings
Share price change calculated from date of research publication through 2/16/22, the launch date of Alta Fox’s campaign.
the public markets.
6
Alta Fox’s History of Reluctant Activism
Alta Fox is not an “activist fund.” We prefer to work collaboratively with management teams and take a long-term view of
our public market investments. However, in two instances prior to Hasbro, Alta Fox was compelled to stand up for
shareholders to improve value creation and succeeded in unlocking significant value.
Enlabs (NLAB)
Collectors Universe (CLCT)
• Collectors Universe (CLCT) Šƒ† ‹–• ‘•– ‡š ‡’–‹‘ƒŽ ’‡”‹‘† ‘ˆ
•Šƒ”‡Š‘Ž†‡” ”‡–—”• ƒˆ–‡” Ž–ƒ ‘šǯ• ‹˜‘Ž˜‡‡–Ǥ
•
Enlabs (NLAB) •ƒ™ ‹–• •–‘  ’”‹ ‡ ‘”‡ –Šƒ †‘—„Ž‡ Ž‡•• –Šƒ ƒ
›‡ƒ” ƒˆ–‡” Ž–ƒ ‘šǯ• ‹‹–‹ƒŽ ‹˜‡•–‡–Ǥ
• ˆ–‡” ‡‰ƒ‰‹‰ ™‹–Š –Š‡ ‘’ƒ›ǡ Ž–ƒ ‘š ‘‹ƒ–‡† ƒ ƒŽ–‡”ƒ–‹˜‡
•Žƒ–‡ ‘ˆ †‹”‡ –‘”• ƒ† —Ž–‹ƒ–‡Ž› •‡––Ž‡† ˆ‘” ‘‡ •‡ƒ–Ǥ Ž–ƒ ‘š Žƒ–‡”
’—„Ž‹ Ž› ‘’’‘•‡† ƒ „—›‘—– †‡ƒŽ ˆ‘” Ǥ Š‡ ‘ˆˆ‡” –Š‡ ‹ ”‡ƒ•‡† „›
ʹ͵Ψǡ ™Š‹ Š –Š‡ ƒŒ‘”‹–› ‘ˆ •Šƒ”‡Š‘Ž†‡”• ƒ ‡’–‡†Ǥ
•
 ƒ—ƒ”› ʹͲʹͲǡ –ƒ‹ ’Ž ƒ†‡ ƒ ‘ˆˆ‡” –‘ „—› –Š‡ „—•‹‡•• ˆ‘” ƒ
‡‰Ž‹‰‹„Ž‡ ’”‡‹—Ǥ Ž–ƒ ‘š ’—„Ž‹ Ž› ‘’’‘•‡† –Š‡ †‡ƒŽ ƒ† ™ƒ•
ƒ„Ž‡ –‘ ‰ƒ”‡” •—ˆˆ‹ ‹‡– •—’’‘”– –‘ „‘–Š „Ž‘  –Š‡ †‡ƒŽ ƒ†
—Ž–‹ƒ–‡Ž› •‡ —”‡ ƒ ͵ʹΨ ’”‡‹— ˆ‘” ƒŽŽ •Šƒ”‡Š‘Ž†‡”•Ǥ
• The stock returned 240% from Alta Fox’s first involvement to the
final sale of the company.
•
The stock returned 132% from Alta Fox’s first involvement to
the final sale of the company.
• Ž–ƒ ‘š •‘Ž† œ‡”‘ •Šƒ”‡• ˆ‘ŽŽ‘™‹‰ ‹–• ƒ –‹˜‹•– ‹˜‘Ž˜‡‡– —–‹Ž –Š‡
ˆ‘” ‡† •ƒŽ‡Ǥ
•
Ž–ƒ ‘š •‘Ž† œ‡”‘ •Šƒ”‡• ˆ‘ŽŽ‘™‹‰ ‹–• ƒ –‹˜‹•– ‹˜‘Ž˜‡‡– —–‹Ž –Š‡
•ƒŽ‡Ǥ
Ž–ƒ ‘šǯ• ‹•–‘”›‘ˆ‡Ž— –ƒ– –‹˜‹•
Ticker:
̈́ʹ͹Ǥͳͺ
Initial Acquisition
Offer
̈́͹ͷǤʹͷ
Revised Acquisition
Offer
̈́ͻʹǤͲͲ
Did Alta Fox Tender Shares at
Revised Offer?
‘
ʹʹǤͲͲ
ͶͲǤͲͲ
ͷ͵ǤͲͲ
‡•
Date of Activist Involvement
Stock Price at Publication
—‡ʹͲʹͲ
—Ž›ʹͲʹͲͳ
ͳǤ‡ˆ‡”‡ ‡•ǯ••–‘ ’”‹ ‡ƒ––Š‡†ƒ–‡‘ˆŽ–ƒ ‘šǯ•‹‹–‹ƒŽ”‡•‡ƒ” Š’—„Ž‹ ƒ–‹‘
7
Today’s Agenda
Introduction
Executive Summary
The Case for Boardroom Change
Persistent Strategic Missteps Driving Significant Underperformance
Lack of Relevant Board Skills Hampering Effective Oversight
Our Solution: Highly Qualified, Independent Nominees
Appendix
8
About Hasbro
ƒ•„”‘‹•‡••‡–‹ƒŽŽ›ƒŠ‘Ž†‹‰ ‘’ƒ›–Šƒ–Š‘—•‡•–Š”‡‡†‹•–‹ –ǡ—†‡”Ž›‹‰„—•‹‡••Ž‹‡•™‹–Šˆ‡™•›‡”‰‹‡•Ǥ
Consumer Products: 43% of FY21 EBITDA
ƒ•„”‘ ’”‘†— ‡† ‹–• ˆ‹”•– –‘› ‹ ͳͻͶʹǤ
‡› owned ˆ”ƒ Š‹•‡ ‹–‡ŽŽ‡ –—ƒŽ ’”‘’‡”–› ȋDz dzȌ ‹ Ž—†‡ǣ › ‹––Ž‡ ‘›ǡ
”ƒ•ˆ‘”‡”•ǡ ‡”ˆǡ ‘™‡” ƒ‰‡”•ǡ ‡’’ƒ ‹‰ ƒ† ƒ••Ǥ
‘‹ owned ‰ƒ‡•ǣ ‘‘’‘Ž›ǡ Ž—‡ǡ ƒ„‘‘ǡ ƒ––Ž‡•Š‹’ǡ ‹ˆ‡ǡ ƒ†›
ƒ†ǡ ‘‡ – ‘—”ǡ ™‹•–‡”ǡ ‘””›Ǩǡ —‰”› —‰”› ‹’’‘• ƒ†
’‡”ƒ–‹‘Ǥ
•
•
•
Wizards of the Coast: 46% of FY21 EBITDA
‘—†‡† ‹ ͳͻͻͲǤ
“—‹”‡† „› ƒ•„”‘ ‹ ͳͻͻͻ ˆ‘” ̱̈́ͶͲͲ ‹ŽŽ‹‘Ǥ
‡› ˆ”ƒ Š‹•‡• ‹ Ž—†‡ǣ
• ƒ‰‹ ǣ Š‡ ƒ–Š‡”‹‰ ȋDz dzȌ Ȃ ‹†—•–”› Ž‡ƒ†‹‰ –”ƒ†‹‰ ƒ”†
‰ƒ‡ founded in 1993Ǥ
• —‰‡‘• Ƭ ”ƒ‰‘• ȋDzƬdzȌ Ȃ ‹†—•–”› Ž‡ƒ†‹‰ ˆƒ–ƒ•› ”‘Ž‡
’Žƒ›‹‰ ‰ƒ‡ founded in 1974Ǥ
•
•
•
Hasbro’s Hassenfeld Family History
Entertainment: 12% of FY21 EBITDA
•
•
•
•
•
‘—†‡† ‹ ͳͻ͹Ͳ ƒ• ƒ —•‹ †‹•–”‹„—–‘”Ǥ
š’ƒ†‡† ‹–‘ ˆ‹ŽȀ †‹•–”‹„—–‹‘ ‹ ʹͲͲͷ –Š”‘—‰Š –Š‡ ƒ “—‹•‹–‹‘
‘ˆ ‘ Š –‡”–ƒ‹‡–Ǥ
‡˜‡Ž‘’‡† ‹ǦŠ‘—•‡ ‘–‡– †‡˜‡Ž‘’‡– ‡š’‡”–‹•‡ –Š”‘—‰Š –Š‡
ƒ “—‹•‹–‹‘ ‘ˆ •‡˜‡”ƒŽ ’”‘†— –‹‘ •–—†‹‘•Ǥ
ƒ•„”‘ „‘—‰Š– –‡”–ƒ‹‡– ‡ ȋDz‡‡dzȌ ‹ ʹͲͳͻ ˆ‘” $4.6 billionǤ
‘†ƒ›ǡ ‹– ’”‹ƒ”‹Ž› ˆ‘ —•‡• ‘ ˆ‹”•–Ǧ’ƒ”–› ƒ† –Š‹”†Ǧ’ƒ”–› ƒ† ˆ‹Ž
’”‘†— –‹‘ ƒ† †‹•–”‹„—–‹‘Ǥ
Source: public filings. FY2021 EBITDA representation exceeds 100% due to exclusion of corporate overhead.
•
•
•
ƒ•„”‘ ™ƒ• ˆ‘—†‡† ƒ† ‘™‡† „› –Š‡ ƒ••‡ˆ‡Ž† ˆƒ‹Ž›Ǥ
‹ ‡ ͳͻ͹Ͳǡ ƒ•„”‘̵• Ž‡ƒ†‡”•Š‹’ Šƒ• ‘•‹•–‡–Ž› ‹ Ž—†‡† •‡˜‡”ƒŽ
‡„‡”• ‘ˆ –Š‡ ƒ••‡ˆ‡Ž† ˆƒ‹Ž›ǡ ‹ Ž—†‹‰ —””‡– Šƒ‹”ƒ ‡”‹–—•
ƒ† ˆ‘”‡” ǡ Žƒ ƒ••‡ˆ‡Ž†Ǥ
‘†ƒ›ǡ 10 out of 13 current Board members were appointed while Mr.
Hassenfeld ™ƒ• Šƒ‹” ‘ˆ –Š‡ š‡ —–‹˜‡ ‘‹––‡‡ ƒ† ƒ –‹˜‡Ž› ‹˜‘Ž˜‡†
‹ •‡˜‡”ƒŽ ‘–Š‡” ‘‹––‡‡•ǡ Ž‡ƒ†‹‰ —• –‘ “—‡•–‹‘ –Š‡‹” ‘„Œ‡ –‹˜‹–›Ǥ
ͳǤŠ––’•ǣȀȀ™™™Ǥˆƒ‹Ž›„—•‹‡••ƒ‰ƒœ‹‡Ǥ ‘Ȁ†‡ƒ–ŠǦ„—•‹‡••
9
The Current Board Has Overseen Long-Term Underperformance
ƒ•„”‘Šƒ• ‘•‹•–‡–Ž›—†‡”’‡”ˆ‘”‡†„‘–Š–Š‡ƬͷͲͲƒ†‹–• Š‘•‡ ‘•—‡”„‡ Šƒ”‘˜‡”–Š‡Žƒ•–ˆ‹˜‡›‡ƒ”•Ǥ
Hasbro’s Annualized Returns Have Underperformed
ʹͷΨ
ʹͳǤͳΨ
ʹͲΨ
ͳͻǤʹΨ
ͳͺǤʹΨ
ͳͷǤͶΨ
ͳͷǤͲΨ
ͳͷΨ
ͳͳǤ͸Ψ
ͳͲΨ
ͷΨ
͹ǤͲΨ
ʹǤ͹Ψ
ͳǤͻΨ
ͲΨ
ͷǦ‡ƒ”
ƒ•„”‘—ƒŽ‹œ‡†‡–—”
͵Ǧ‡ƒ”
ƬͷͲͲ—ƒŽ‹œ‡†‡–—”
ͳǦ‡ƒ”
—••‡ŽŽͳͲͲͲ‘•—‡”‹• ”‡–‹‘ƒ”› †‡š—ƒŽ‹œ‡†‡–—”
ƒ•„”‘‘–ƒŽŠƒ”‡Š‘Ž†‡”‡–—”ƒŽ›•‹•ȋDzdzȌ
5-Year TSR
3-Year TSR
1-Year TSR
Underperformance vs. S&P 500 Annualized Return
-94.6%
-47.1%
-3.8%
Underperformance vs. Russell 1000 Consumer Discretionary Index Annualized Return
-116.8%
-69.4%
9.8%
Source: Bloomberg. HAS and S&P 500 returns assume dividends are reinvested. Data through 2/16/22, the launch date of Alta Fox’s campaign.
10
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹͵Ǥ
The Current Board’s “Brand Blueprint” Strategy Has Failed to Deliver for Both
Shareholders and the Company’s Most Valuable Franchise
•
•
‘” ‘˜‡” ƒ †‡ ƒ†‡ǡ ƒ•„”‘ Šƒ• ˆ‘ŽŽ‘™‡† ‹–• DzBrand Blueprintdz
•–”ƒ–‡‰› Ȃ ‡š’ƒ†‹‰ „”ƒ†• ƒ ”‘•• ’Žƒ–ˆ‘”• –‘ †”‹˜‡
‘‹ Šƒ‡Ž ‡‰ƒ‰‡‡– ƒ† ‹ ”‡ƒ•‡† ”‡˜‡—‡•Ǥ
 ”‡ƒŽ‹–›ǡ ‹– •‡‡• –Š‡ •–”ƒ–‡‰› Šƒ• •‡”˜‡† ƒ• –Š‡ „ƒ•‹• –‘ justify
expensive, value-destructive acquisitions ™Š‹ Š Šƒ˜‡ ƒ•‡†
—†‡”Ž›‹‰ ’‘‘” ’‡”ˆ‘”ƒ ‡Ǥ
• Š‡ Dz”ƒ† Ž—‡’”‹–dz Šƒ• ˆƒ‹Ž‡† –‘ †‡Ž‹˜‡” Ȃ ’— –—ƒ–‡† „› illadvised acquisitionsǡ haphazard execution ƒ† poor
disclosure practices with no oversight or accountability.
• Despite disappointing returns, the Board and management
continue to double down on the strategyǡ ™Š‹ Š Šƒ•
—†‡”‹˜‡•–‡† ‹ ƒ•„”‘ǯ• ‘•– ˜ƒŽ—ƒ„Ž‡ •‡‰‡–ǡ Ȃ
ˆ—”–Š‡” ‘ˆ‹”‹‰ –Š‡ •–”ƒ–‡‰›ǯ• ˜ƒŽ—‡ †‡•–”— –‹‘ ‹ ‘—” ˜‹‡™Ǥ
•
‹˜‡ ‹–• ‘‹–‡– –‘ –Š‡ Dz”ƒ† Ž—‡’”‹–dz •–”ƒ–‡‰›ǡ ™‡
„‡Ž‹‡˜‡ –Š‡ ‘ƒ”† Šƒ• ˆƒ‹Ž‡† –‘ ”‹–‹ ƒŽŽ› ”‡˜‹‡™ „—•‹‡••
‘’‘‡–• –‘ †‡–‡”‹‡ ™Š‡–Š‡” –Š‡› •–‹ŽŽ ƒ†† ˜ƒŽ—‡ ‹
ƒ•„”‘ǯ• ‘‰Ž‘‡”ƒ–‡ •–”— –—”‡Ǥ
Total Shareholder Return Since Brand Blueprint
Announcement
400%
350%
300%
250%
”ƒ†Ž—‡’”‹–
ˆ‹”•–ƒ‘— ‡†
ȋͳͳȀͻȀͳͲȌͳ
200%
150%
100%
50%
0%
-50%
-100%
HAS
S&P 500
We believe the “Brand Blueprint” strategy is little more than a cover for “empire-building” without financial
discipline, and significant change in strategic direction is needed.
11
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹͸Ǥ
The Current Board Has Failed to Stem Long-Term Market Share Losses
•
•
‡•’‹–‡ ‹˜‡•–‹‰ ‘”‡ –Šƒ ̈́ͷ „‹ŽŽ‹‘ ‘˜‡” –Š‡ Žƒ•– ˆ‘—” ›‡ƒ”• ‹
–Š‡ ‘•—‡” „—•‹‡•• ƒ† •’‡†‹‰ •Šƒ”‡Š‘Ž†‡” ƒ’‹–ƒŽ ‘
—‡”‘—•
ƒ “—‹•‹–‹‘•ǡ
Hasbro
has
significantly
underperformed against Mattel since 2019 on both top-line
and bottom-line results.
 ‘—” ˜‹‡™ǡ ƒ•„”‘ǯ• ‘•—‡” „—•‹‡•• Šƒ• —†‡”’‡”ˆ‘”‡† ‘ ƒ
ƒ ”‘ǦŽ‡˜‡Žǡ †‡ Ž‹‹‰ „‘–Š ‹ ”‡˜‡—‡• ƒ† ‡ƒ”‹‰•ǡ ™Š‹Ž‡
‹†—•–”› ”‡–ƒ‹Ž –‘› •ƒŽ‡• Šƒ˜‡ ‰”‘™ ƒ– ̱ͶΨ ‘˜‡” –Š‡ Žƒ•– †‡ ƒ†‡Ǥ
—ƒ”›‘ˆʹͲͳͺǦʹͲʹͳ‡•—Ž–•
Company:
Annualized
Revenue Growth
2018 EBITDA
Margins
2021 EBITDA
Margins
ƒ•„”‘ͳ
-0.9%
12.0%
11.3%
6.5%
1.9%
18.5%
ƒ––‡Ž
Note that these numbers reflect organic revenues of both businesses since 2018.
Hasbro Toy & Games Sales vs Industry Growth2
ͳ͸Ͳ
(Indexed to 100)
ͳͶͲ
Urgent change is neededǣ ‹ –Š‡ Žƒ•– –Š”‡‡ ‘–Š•ǡ
ƒ•„”‘ •ƒ™ ‹•‡› ‘˜‡ –™‘ ‘ˆ ‹–• ‡› Ž‹ ‡•‹‰
‘–”ƒ –• –‘ ƒ––‡Žǡ ”‡•—Ž–‹‰ ‹ –Š‡ Ž‘•• ‘ˆ ‘”‡ –Šƒ
̈́͵ͲͲ ‹ŽŽ‹‘ ‘ˆ ”‡˜‡—‡ ȋ‡ƒ”Ž› ͳͲΨ ‘ˆ ‘•—‡”
”‡˜‡—‡ȌǤ Š‡ Ž‘‰Ǧ–‡” –”‡† ‹• ’‘‘” ƒ† ƒ”‡– •Šƒ”‡
Ž‘••‡• ƒ”‡ ƒ ‡Ž‡”ƒ–‹‰Ǥ
ͳʹͲ
ͳͲͲ
ͺͲ
ƒ•„”‘‘•—‡”‡˜‡—‡ȋ‡š Ž—†‹‰ƒ†‡‡Ȍ
‘› †—•–”›ƒŽ‡•ƒ–‡–ƒ‹Ž
ͳǤŽ–ƒ ‘š‡•–‹ƒ–‡•ˆ‘” ‘•—‡”•‡‰‡–ǡ‡š Ž—†‹‰‡‡ ‘–”‹„—–‹‘ǤŠ‹•
†‘‡•‘–ƒ†Œ—•–‘—– ƒ•„”‘ǯ•̈́ͷʹ͵ƒ “—‹•‹–‹‘‘ˆ‘™‡”ƒ‰‡”•Ǥ‡‡ƒ’’‡†‹š
•Ž‹†‡͹ʹˆ‘”‘”‡†‡–ƒ‹Ž•Ǥ
‘—” ‡ǣŽ–ƒ ‘šǡ’—„Ž‹ ˆ‹Ž‹‰•Ǥ
ʹǤŠ‹•ƒƒŽ›•‹•†‘‡•ƒ†Œ—•–ˆ‘”–Š‡̈́͵ͲͲΪ‹’ƒ”–‡”„”ƒ†”‡˜‡—‡ ƒ•„”‘™‹ŽŽ„‡Ž‘•‹‰‹ʹͲʹ͵ˆ‘”‹•‡›”‹ ‡•• ”‘œ‡ǡ
”‘ŽŽ•ǡƒ†‡•ƒ‡‘”•Š‘’ȋ‡ƒ”Ž›ͳͲΨ‘ˆ‘•—‡””‡˜‡—‡•ȌǤ –ƒŽ•‘†‘‡•ƒ†Œ—•–‘—–ˆ‘” ƒ•„”‘ǯ•̈́ͷʹ͵ƒ “—‹•‹–‹‘‘ˆ
‘™‡”ƒ‰‡”•Ǥ‡‡ƒ’’‡†‹š•Ž‹†‡͹ʹˆ‘”‘”‡†‡–ƒ‹Ž•Ǥ
‘—” ‡ǣǡ—”‘‘‹–‘”
12
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰•Ǥ͸͹Ǧ͸ͻǤ
The Current Board Has a Record of Poor Capital Allocation and M&A
Investment
G.I. Joe Video
Game
Transformers,
Micronauts, Ouija
Board Video
Games
eOne
Date
Announced
Price Paid /
Amount
Spent
Approved by
Targeted
Directors?
Result?
‡”•‘–†‹• Ž‘•‡†Ǥ
ƒ‡ƒ˜ƒŽ—ƒ„Ž‡ ‘•—‡”„”ƒ†
ƒ†–—”‹–‹–‘ƒ˜‹†‡‘‰ƒ‡
’”‘’‡”–›Ǥ
3/3
Likely Value-Destructive.
Š‡ Ǥ Ǥ ‘‡ Šƒ•‘–•— ‡‡†‡†ƒ––Š‡„‘š‘ˆˆ‹ ‡ƒ†
˜‹†‡‘‰ƒ‡•ƒ”‡ƒ‡š–”‡‡Ž› ‘’‡–‹–‹˜‡ ƒ–‡‰‘”›
Šƒ•‘–Šƒ†— Š•— ‡••‹Ǥ
‘–†‹• Ž‘•‡†Ǥ
ȀǤ –‡”ƒŽ
‹˜‡•–‡–Ǥ
•‡”‡•‘—” ‡• –‘ †‡˜‡Ž‘’
‰ƒ‡•ˆ‘” ‹ǦŠ‘—•‡Ǥ
3/3
Likely Value-Destructive.
‹‡™‹–Š Ǥ Ǥ ‘‡ǡ ƒ•„”‘Šƒ•–”‹‡†–‘•“—‡‡œ‡–‘‘— Š
‘—–‘ˆ–‹”‡† ƒ†™‹ŽŽŽ‹‡Ž›Šƒ˜‡’‘‘””‡–—”•‘ˆ ƒ’‹–ƒŽǤ
̈́ͶǤ͸„‹ŽŽ‹‘Ǥ
̱ͳͺš”ƒ‹Ž‹‰™‡Ž˜‡
‘–ŠȋDzdzȌ
Ǥ
‡˜‡Ž‘’•Š‘™•ƒ†‘˜‹‡•‹Ǧ
Š‘—•‡ˆ‘”‡š‹•–‹‰„”ƒ†•Ǥ
‡ŽŽ–‘›•”‡Žƒ–‡†–‘‘™‡”ƒ‰‡”•
ƒ†‡š’ƒ†–Š‡‡†‹ƒ
‘’’‘”–—‹–‹‡•Ǥ
Multiple Paid
Deal Rationale
‡’–‡„‡”
ʹͲʹͳ
̈́ʹͲͲ‹ŽŽ‹‘Ϊ
‘ ‡
ˆ‹‹•Š‡† ‰‹˜‡
„”ƒ†‹‰ǫͳ
‡„”—ƒ”›
ʹͲʹͳ
—‰—•–ʹͲͳͻ
3/3
Value-Destructive.
ƒ•„”‘ǯ••–‘ †‡ Ž‹‡†ͻΨ–Š‡†ƒ›‘ˆ–Š‡†‡ƒŽƒ†‹••–‹ŽŽ
„‡Ž‘™–Š‡’”‡Ǧ†‡ƒŽ’”‹ ‡„‡ ƒ—•‡ ƒ•„”‘•‹‰‹ˆ‹ ƒ–Ž›
‘˜‡”’ƒ‹†Ǥ
Power Rangers
ƒ›ʹͲͳͺ
̈́ͷ͵Ͷ‹ŽŽ‹‘Ǥ
‡”•‘–†‹• Ž‘•‡†ǡ
„—– ‡–‹‘‡†
–Šƒ––Š‡‡ƒ”‹‰•
‹’ƒ –‹ ʹͲͳͺ™‘—Ž†
„‡‹ƒ–‡”‹ƒŽǤ
Transformers
Card Game
ʹͲͳ͹
‘–†‹• Ž‘•‡†Ǥ
ȀǤ –‡”ƒŽ
‹˜‡•–‡–Ǥ
•‡”‡•‘—” ‡•–‘†‡˜‡Ž‘’ƒ
”ƒ•ˆ‘”‡”•–”ƒ†‹‰ ƒ”†‰ƒ‡Ǥ
3/3
Value-Destructive.
ˆ–‡”•’‡†‹‰•‹‰‹ˆ‹ ƒ–‹–‡”ƒŽ”‡•‘—” ‡•–‘†‡˜‡Ž‘’
–Š‡‰ƒ‡ǡ‹–‹•‘Ž‘‰‡”•‘Ž†Ǥ
̈́ͳͳʹ‹ŽŽ‹‘Ǥ
‡”•‘–†‹• Ž‘•‡†ǡ
„—–ƒ ˆŽ‹’ǯ•
‘’‡”ƒ–‹‰’”‘ˆ‹–™ƒ•
‡‰ƒ–‹˜‡‹ʹͲͳͶǤ
‡˜‡Ž‘’‘„‹Ž‡‰ƒ‡•‹ǦŠ‘—•‡Ǥ
2/3*
Value-Destructive.
ƒ•„”‘™”‘–‡–Š‡ƒ “—‹•‹–‹‘†‘™–‘œ‡”‘Ž‡••–Šƒ–Š”‡‡
›‡ƒ”•Žƒ–‡”Ǥ
Backflip
—Ž›ʹͲͳ͵
Source: public filings.
1. Alta Fox estimate based on industry checks for AAA video game budgets
3/3
Value-Destructive.
ƒ•„”‘’ƒ‹†‘”‡–ŠƒŠƒŽˆƒ„‹ŽŽ‹‘ˆ‘”ƒ†‡ƒŽ™‹–Š
‹ƒ–‡”‹ƒŽ‡ƒ”‹‰•‹’ƒ –Ǥ‘™‡”ƒ‰‡”• ‘•—‡”
‹–‡”‡•–Šƒ•†‡ Ž‹‡†•‹ ‡–Š‡†‡ƒŽǤ
*Stoddart was not on the Board when
investment was made
13
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹ͲǤ
Case Study: Entertainment One Ltd. (“eOne”) Acquisition
™Šƒ–™‡„‡Ž‹‡˜‡™ƒ•„‘–Š–Š‡†‡ˆ‹‹‰‘‡–ƒ†–Š‡‰”‡ƒ–‡•–ˆƒ‹Ž—”‡‘ˆ–Š‡Dz”ƒ†Ž—‡’”‹–dz•–”ƒ–‡‰›ǡ ƒ•„”‘ƒ “—‹”‡†‡‡
‹‡ ‡„‡”ʹͲͳͻˆ‘” $4.6 billion, nearly 1/3 of the Company’s entire enterprise value at the time.
•
ƒ•„”‘ ’ƒ‹† ƒ ͵ͳΨ ’”‡‹— –‘ ‡‡ǯ• ’”‡Ǧ†‡ƒŽ •Šƒ”‡ ’”‹ ‡ǡ nearly 18x TTM EBITDA, –‘
ƒ “—‹”‡ ‡‡Ǥ
• ‘ ˆ—† –Š‡ ƒ “—‹•‹–‹‘ǡ ƒ•„”‘ ‹••—‡† ‘”‡ –Šƒ ͳͲ ‹ŽŽ‹‘ •Šƒ”‡• ‘ˆ ‘‘ •–‘ ǡ
diluting shareholders by more than 8%ǡ ƒ† added more than $3 billion of debt –‘ –Š‡
„ƒŽƒ ‡ •Š‡‡–Ǥ
‹ ‡‡‡ ‡ƒŽ
‘— ‡‡–͵
• ‡‡ǯ• ™ƒ• ƒ™ƒ”†‡† ̈́ͳʹ ‹ŽŽ‹‘ ‹ ‡–‹”‡Ž› –‹‡Ǧ„ƒ•‡† ‡“—‹–› ‰”ƒ–• ˆ‘ŽŽ‘™‹‰ –Š‡
‘’Ž‡–‹‘ ‘ˆ –Š‡ ƒ “—‹•‹–‹‘Ǥ
• Hasbro’s shares declined 9% the day the deal was announced ƒ† Šƒ˜‡ ‘–‹—‡† –‘
—†‡”’‡”ˆ‘” •‹ ‡Ǥ
•
ƒ•„”‘ Žƒ‹‡† –Šƒ– „› ʹͲʹʹǡ ‡‡ ™‘—Ž† †”‹˜‡ ̈́ͳ͵Ͳ ‹ŽŽ‹‘ ‹ ‹ ”‡‡–ƒŽ ”—Ǧ”ƒ–‡
•›‡”‰‹‡• „‡–™‡‡ ‘•—‡” ƒ† –‡”–ƒ‹‡– Æ ‹•–‡ƒ†ǡ ™‡ ‡•–‹ƒ–‡ that
Consumer and Entertainment EBITDA will have declined by 10% or $79 million over
that period.1
•
”‡ƒŽ‹œ‡†Ǥʹ
‘”†‹‰ –‘ ƒƒ‰‡‡–ǡ –Š‡ ƒŒ‘”‹–› ‘ˆ –Š‡ ‡‡ •›‡”‰‹‡• Šƒ˜‡ ƒŽ”‡ƒ†› „‡‡
‡ „‡Ž‹‡˜‡ ‡‹–Š‡” ͳȌ ƒ•„”‘ ‹• Ž›‹‰ ƒ„‘—– –Š‡ •›‡”‰‹‡• ‡š–”ƒ –‡† ˆ”‘ –Š‡ †‡ƒŽ ‘” ʹȌ ‹–•
‘”‡ „—•‹‡•• ‹• †‡–‡”‹‘”ƒ–‹‰ ‡˜‡ ˆƒ•–‡” –Šƒ ™‡ –Š‘—‰Š– —†‡” ‹–• Dz”ƒ† Ž—‡’”‹–dz
•–”ƒ–‡‰›Ǥ
-8.4%
Ƭ
ͷͲͲ
59.5%
EBITDA by Segment1
Consumer
Entertainment
Corporate and Other
Total EBITDA ex-WOTC
Change in EBITDA ex-WOTC
Decline in EBITDA %
2019
$587
$148
$77
$812
2022E
$607
$141
-$15
$733
-$79
-10%
We believe the costly and ill-advised eOne deal destroyed significant shareholder value.
1. Alta Fox estimates cited in initial Hasbro presentation, including
corporate and other expense.
2. Hasbro Q1 2022 conference call
Source: Bloomberg normalized share price performance, public filings.
3. Source: Bloomberg. Data through 2/16/22
14
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰•Ǥ͸ͷǦ͸͸Ǥ
We Believe Hasbro’s Track Record of Rejecting Value-Maximizing
Opportunities Stems from a Pervasive Hassenfeld Family Influence
In addition to spending significant shareholder capital on ill-advised acquisitions, Hasbro’s insular Board has also refused
to pursue value-maximizing transactions and allowed management to underperform.
Buyout Offer #1: Mattel
Buyout Offer #2: Providence Equity Partners
 ͳͻͻ͸ǡ Mattel offered to buy Hasbro for a 73% premiumǤ ”Ǥ
 —‡ʹͲͳͲǡ”‘˜‹†‡ ‡“—‹–›ƒ”–‡”•ƒ’’”‘ƒ Š‡† ƒ•„”‘ǯ•
ƒ••‡ˆ‡Ž† ƒ† –Š‡ ‘ƒ”† ”‡Œ‡ –‡† –Š‡ ‘ˆˆ‡” ƒ† „Ž‘ ‡† ƒ––‡Ž
‘ƒ”†™‹–Š‹–‡”‡•–‹ƒ “—‹”‹‰–Š‡„—•‹‡••ǤŠ‡‘ƒ”†”‡Œ‡ –‡†
ˆ”‘ ƒŽŽ‹‰ ƒ •’‡ ‹ƒŽ ‡‡–‹‰ ‘ˆ •Šƒ”‡Š‘Ž†‡”•Ǥ This decision cost
–Š‡•—‹–‘”ǡ”‡•—Ž–‹‰‹•‹‰‹ˆ‹ ƒ–˜ƒŽ—‡†‡•–”— –‹‘ˆ‘”Hasbro
shareholders billions. › –Š‡ ‡† ‘ˆ ”Ǥ
shareholders as Hasbro’s stock went on to underperform the
ƒ••‡ˆ‡Ž†ǯ• –‡—”‡ ‹
ʹͲͲ͵ǡ Hasbro’s stock price was more than 30% below Mattel’s
S&P 500 by more than 200%.
1996 offer.
Alta Fox believes the current Board maintains the same insular culture and unwillingness to seriously
evaluate value-enhancing opportunities for shareholders.
1. https://www.nytimes.com/1996/02/03/business/mattel-ends-bid-to-merge-with-hasbro.html
2. http://theswca.com/index.php?action=disp_item&item_id=53124
3. https://toynewsi.com/news.php?itemid=16035
15
Hasbro Has a History of Putting Inside Interests Before Shareholders In Our View
The Hassenfeld family’s influence promoted an insular, controlled-company culture that we believe remains today.
•
10 ‘—– ‘ˆ 13 —””‡– ‘ƒ”† ‡„‡”• ™‡”‡ ƒ’’‘‹–‡† ™Š‹Ž‡ Žƒ ƒ••‡ˆ‡Ž† ™ƒ• Šƒ‹” ‘ˆ –Š‡ š‡ —–‹˜‡ ‘‹––‡‡Ǥ
•
‹˜‡ –Š‡ ‘ƒ”†ǯ• Š‹•–‘”› ‘ˆ ’”‹‘”‹–‹œ‹‰ –Š‡ ƒ••‡ˆ‡Ž† ˆƒ‹Ž›ǯ• ‹–‡”‡•–• ƒŠ‡ƒ† ‘ˆ •Šƒ”‡Š‘Ž†‡”•ǡ we question if these
directors possess the objectivity necessary to properly evaluate the Company's performance and go-forward
strategy.
•
The consequences of the legacy of entrenchment are clear todayǣ ‹ ’”‹Ž ʹͲʹʹǡ ƒ––‡Ž ™ƒ• ”‡’‘”–‡† –‘ Šƒ˜‡ ”‡ ‡‹˜‡†
”‡†‹„Ž‡ „—›‡” ‹–‡”‡•–Ǥ
•
ƒ•„”‘ǡ ™Š‹ Š ™‡ „‡Ž‹‡˜‡ ‹• ƒ ‘”‡ ƒ––”ƒ –‹˜‡ ‘’ƒ›ǡ Šƒ• ‘– ”‡ ‡‹˜‡† •‹‹Žƒ” ƒ “—‹•‹–‹‘ ‹–‡”‡•– †—‡ –‘ –Š‡
ƒ””ƒ–‹˜‡ ’‡”’‡–”ƒ–‡† „› –Š‡ ‘ƒ”†ǯ• Š‹•–‘”› ‘ˆ ”‡Œ‡ –‹‰ ‘—–•‹†‡ ‹–‡”‡•– ƒ† ‡–”‡ Š‡† ‹†•‡– Ȃ ™Š‹ Š •–‡ ˆ”‘
–Š‡ ƒ••‡ˆ‡Ž† ˆƒ‹Ž›ǯ• ‹ˆŽ—‡ ‡Ǥ
Alta Fox believes the current Board is not committed to objectively evaluating all value-enhancing
opportunities and fresh perspectives are required.
1.
https://www.wsj.com/articles/mattel-has-held-talks-with-buyout-firms-11651014437
16
Hasbro’s Undisciplined Approach to Capital Allocation
Hasbro’s seemingly reckless approach to capital allocation has emphasized empire-building over shareholder returns,
resulting in significant balance sheet exposure to hyper-competitive, low ROIC categories compared to Mattel.
• On eOne, Hasbro pursued a transformational
entertainment acquisition at all costs for over
half a decade despite serious investor
concerns.
• Hasbro’s capital-intensive strategy contrasts
starkly vs. Mattel’s capital-light approach.
•
†‡”‡™‘”‡‹œǡƒ––‡ŽŠƒ•’—”•—‡†ƒ
’‘Žƒ”‘’’‘•‹–‡Dzcapital lightdz•–”ƒ–‡‰›ƒ†Šƒ•
outperformed Hasbro by nearly 100% during
his tenureǤ
‡ƒ”
“—‹•‹–‹‘ƒ”‰‡–
‡–ƒ‹Ž•
ʹͲͳͶ
”‡ƒ™‘”•
ƒ•„”‘ǯ••–‘ ™ƒ•†‘™͸Ψ‹–Š‡–™‘
†ƒ›•ˆ‘ŽŽ‘™‹‰–Š‡†‹• —••‹‘–Šƒ–‡”‰‡”
–ƒŽ•™‡”‡‡•—‹‰Ǥ
ʹͲͳ͹
‹‘•‰ƒ–‡ˆ‘”ε̈́ͶͲ
‘†ƒ›ǡ‹‘•‰ƒ–‡–”ƒ†‡•ˆ‘”̱̈́ͳ͵ǤͷͲǤ
ʹͲͳͻ
‡‡ ˆ‘”̈́ͶǤ͸„‹ŽŽ‹‘
‘’Ž‡–‡†‹ƒŠ‹‰ŠŽ›†‹Ž—–‹˜‡†‡ƒŽǤ
“We have a Capital Light strategy to content that allows us to work with
the right studio and the right distribution partner on the right project, on
the right terms. And this allows us to develop and produce multiple projects
concurrently at scale. We believe we have in place the right economic
model, which is not dependent on capital investment for Mattel. Film
financing can be a risky business, and this is not our area of core expertise.”
- Ynon Kreiz, Mattel CEO, 3.11.21
D.A. Davidson Conference
Hasbro immediately rejected our calls to re-examine its corporate structure and capital allocation,
providing no detailed explanation or open-mindedness on the subject.
1. https://www.hollywoodreporter.com/movies/movie-news/dreamworks-animation-hasbro-end-merger-749215/
2. https://www.cnbc.com/2018/02/27/lionsgate-shares-jump-after-report-toymaker-hasbro-nearly-acquired-it-last-year.html
3. https://investor.hasbro.com/news-releases/news-release-details/hasbro-board-directors-issues-letter-shareholders
17
The Alta Fox Slate Approach to Capital Allocation
When market environments change, optimal pathways for creating shareholder value change as well. Alta Fox’s nominees
have several examples of exercising this mentality to the benefit of all shareholders.
Marcelo Fischer
Carolyn Johnson
NEWARK, NJ, May 05, 2022 -- IDT Corporation
(NYSE: IDT), a global provider of fintech, cloud
communications, and traditional communications
services, announced today that, in light of current
market conditions, its Board of Directors has
postponed the spinoff of its net2phone cloud
communications segment, which it had been
preparing to spin off on or before July 31st, 2022.
NEW YORK, DEC. 21, 2017 -- Voya Financial, Inc.
(NYSE:VOYA), announced today that it will divest
substantially all of its Closed Block Variable Annuity
(CBVA) segment and its individual fixed and fixed
indexed annuity business through an agreement with
a consortium of investors led by affiliates of Apollo
Global Management, LLC Crestview Partners and
Reverence
Capital
Partners.
In
addition
to
significantly reducing market and insurance risk,
the agreement will enable Voya to focus on its
higher-growth,
higher-return,
capital-light
Retirement,
Investment
Management
and
Employee Benefits businesses.
‘—” ‡ǣˆ‹Ž‹‰•
18
The Current Board Has Overseen Concerning Governance Practices
We believe there are significant governance issues at Hasbro, many of which can be traced back to what appears to be the
Board’s historic prioritization of the Hassenfeld family’s interests over those of shareholders.
Highly Questionable
Chairman (pg. 39)
Lack of Effective Oversight
of Strategy (pg. 45)
Insular, Private Company
Culture (pg. 40)
Insufficient Investor
Disclosure (pg. 46-47)
Misaligned Executive
Compensation (pgs. 41-44)
Unwillingness to
Collaborate with
Shareholders (pg. 48)
Defensive and Reactionary
Board Expansion (pg. 49)
19
History of Egregious Compensation and Lack of Shareholder Alignment
Under the Hasbro Board
ͷǦ‡ƒ” ƒ•„”‘‡”ˆ‘”ƒ ‡˜•Ǥƒ›
Cumulative 5-Year Hasbro Total
Management & Board Compensation
Cumulative 5-Year Hasbro Total CEO
Compensation
Cumulative 5-Year Hasbro Total
Shareholder Return
Cumulative 5-Year S&P 500 Total
Shareholder Return
$78,679,581
14.1%
108.7%
$218,267,017
Hasbro Total Management & Board
Compensation
Hasbro Total CEO Compensation
̈́͵ͲǡͲͲͲǡͲͲͲ
̈́͹ͲǡͲͲͲǡͲͲͲ
̈́ʹͷǡͲͲͲǡͲͲͲ
̈́͸ͲǡͲͲͲǡͲͲͲ
̈́ʹͲǡͲͲͲǡͲͲͲ
̈́ͷͲǡͲͲͲǡͲͲͲ
̈́ͶͲǡͲͲͲǡͲͲͲ
̈́ͳͷǡͲͲͲǡͲͲͲ
̈́͵ͲǡͲͲͲǡͲͲͲ
̈́ͳͲǡͲͲͲǡͲͲͲ
̈́ʹͲǡͲͲͲǡͲͲͲ
̈́ͷǡͲͲͲǡͲͲͲ
̈́ͳͲǡͲͲͲǡͲͲͲ
̈́Ͳ
̈́Ͳ
ʹͲͳ͹
ʹͲͳͺ
ʹͲͳͻ
ʹͲʹͲ
ʹͲʹͳ
ʹͲͳ͹
ʹͲͳͺ
ʹͲͳͻ
ʹͲʹͲ
ʹͲʹͳ
”‹‘”–‘Ž–ƒ ‘šǯ•
‡‰ƒ‰‡‡–ǡnone
of the current
Directors Šƒ†‡˜‡”
„‘—‰Š–ƒ•‹‰Ž‡
•Šƒ”‡‘ˆ ƒ•„”‘
•–‘ ‘–Š‡‘’‡
ƒ”‡–Ȃ ‹†‹ ƒ–‹‰
ƒ Ž‡ƒ”
‹•ƒŽ‹‰‡–™‹–Š
•—ˆˆ‡”‹‰
•Šƒ”‡Š‘Ž†‡”•‹‘—”
˜‹‡™Ǥͳ
Alta Fox has no confidence in the Board’s ability to align executive compensation with the success of
shareholders and believes the Compensation Committee needs to be meaningfully refreshed.
Source: Proxy filings, Bloomberg. HAS and S&P 500 returns assume dividends are reinvested. Data through 2/16/22, the launch date of Alta Fox’s campaign.
1. Filings show that Michael Burns and Chris Cocks recently purchased shares following our criticism of the Board’s lack of open market purchases.
20
History of Egregious Compensation and Lack of Shareholder Alignment
Under the Hasbro Board (Continued)
Hasbro’s Compensation Committee – chaired by Ms. Gersh – has consistently lowered performance targets despite
declining performance, allowing management compensation to rise while shareholders have suffered.
Annual Executive Compensation Targets
Revenue
y/y %
EBIT Margin
FCF
y/y %
2018
$5,329,612
1%
ͳͷǤͻͲΨ
̈́͸ͳͷǡ͹͵͹
17%
2019
̈́Ͷǡ͹ͻͳǡͳ͵ʹ
-10%
ͳͶǤͲͲΨ
̈́ͷ͵Ͷǡ͹͸ʹ
-13%
2020
̈́͸ǡʹͺ͵ǡͲ͹͹
4%*
ͳͶǤ͹ͲΨ
̈́Ͷ͸͹ǡ͸Ͳ͸
-13%
2021
$5,969,053
-5%
ͳ͵Ǥ͹ͲΨ
̈́ͶͷͳǡͲͲͲ
-4%
ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘™ƒ• 279% Š‹‰Š‡”‹ ʹͳ–Šƒ‹ ͳͺǡ†‡•’‹–‡‘”‰ƒ‹ ”‡˜‡—‡–ƒ”‰‡–•„‡‹‰11.7%
Ž‘™‡”–ŠƒʹͲͳͺŽ‡˜‡Ž•Ǥ
Hasbro 2021 Organic Revenue Target Analysis
2018 Organic Revenue Target
ʹͲʹͳ”‰ƒ‹ ‡˜‡—‡ƒ”‰‡–
$5,329,612
̈́Ͷǡ͹Ͳͺǡ͵Ͷ͸
ȗ‰”‘™–Š”ƒ–‡‹•ƒ†Œ—•–‡†ˆ‘”‡‡̵• ‹‘”‰ƒ‹ ”‡˜‡—‡ ‘–”‹„—–‹‘
‘—” ‡ǣˆ‹Ž‹‰•
Hasbro CEO Comp
Total Compensation
FY18
$8,499,623
ͳͻ
̈́ͳ͹ǡͻ͸Ͳǡͺ͹ͺ
ʹͲ
̈́ͳ͸ǡ͸͸ͺǡͲͳͲ
FY21
$23,714,681
21
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹ͳǤ
History of Egregious Compensation and Lack of Shareholder Alignment
Under the Hasbro Board (Continued)
Hasbro’s CEO position receives the third-highest compensation among peers of immediately similar size, yet the
Company’s three-year cumulative TSR was fourth-lowest in the group.
Hasbro
$26,844,914
37%
Hasbro Rank Out of 31
Companies (High to Low)
Š”‡‡Ǧ‡ƒ”
ʹ͹–Š ‘—–‘ˆ͵ͳ
ʹͳ
‘’
͵”† ‘—–‘ˆ͵ͳ
•‹‰Ž‘‘„‡”‰ǡ™‡”ƒƒ’—„Ž‹ • ”‡‡ˆ‘” ‘•—‡” ‘’ƒ‹‡•–‘
‡šƒ‹‡ ƒ•„”‘ǯ•”‡Žƒ–‹˜‡ ‘’‡•ƒ–‹‘Ǥ
ͳǤ
ʹǤ
͵Ǥ
Bloomberg Screen Criteria:
US listed Consumer Discretionary Subcategories:
‘•—‡”‹• ”‡–‹‘ƒ”›”‘†— –•
‘•—‡”‹• ”‡–‹‘ƒ”›‡–ƒ‹Ž
‘•—‡”‹• ”‡–‹‘ƒ”›Š‘Ž‡•ƒŽ‡
Total FY21 CEO Comp vs 3-Year TSR
(For Peers of Immediately Similar Size)
350%
3-Year Cumulative Total Shareholder Return
Minimum
ͳ•–“—ƒ”–‹Ž‡
ʹ†“—ƒ”–‹Ž‡
͵”†“—ƒ”–‹Ž‡
Maximum
FY21 CEO
Compensation 3-Year TSR
$4,162,400
18%
̈́ͳͲǡͳͳͳǡ͵ʹ͸
͸ͶΨ
̈́ͳ͵ǡͶͳͲǡ͹͹Ͷ
ͳͶͶΨ
̈́ͳ͸ǡ͸ͲͲǡͶͺʹ
ʹͲ͸Ψ
$68,090,432
1117%
POOL
300%
LAD
BBWI
WSM
250%
DHI
TSCO
FBHS
RACE
LKQ
NVR
200%
150%
APTV
MAS
KMX BBY
100%
MHK
AAP GPC
Three-Year S&P
500 TSR of 100%
WHR
PHM
MAT
BURL
ULTA
ROSTBWA
50%
HAS
NWL
VFC
‡ •‘”–‡† –Š‡ ‘—–’—– „› ƒ”‡– ƒ’‹–ƒŽ‹œƒ–‹‘ ƒ† ‘’ƒ”‡† ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘ ƒ† ™‹–Š –Š‡ ͳͷ ‘•—‡” ‘’ƒ‹‡• ‘ˆ ‹‡†‹ƒ–‡Ž›
‰”‡ƒ–‡” •‹œ‡ ƒ† ͳͷ ‘•—‡” ‘’ƒ‹‡• ‘ˆ ‹‡†‹ƒ–‡Ž› •ƒŽŽ‡” •‹œ‡Ǥ
ƒ•„”‘ • ‘”‡† ‹ –Š‡ Š‹‰Š‡•– “—ƒ”–‹Ž‡ ‘ˆ ‘’‡•ƒ–‹‘ǡ „—– –Š‡ ™‘”•–
“—ƒ”–‹Ž‡ ˆ‘” –Š”‡‡Ǧ›‡ƒ” Ǥ
0%
$0
$5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000
FY21 CEO Compensation (USD)
ƒ–‡•ˆ‘”ǣͳʹȀ͵ͳȀʹͲͳͺǦͳʹȀ͵ͳȀʹͲʹͳ
”ƒ’Š”‡‘˜‡• ǡǡǡƒ†ˆ‘”˜‹•—ƒŽ‹œƒ–‹‘’—”’‘•‡•ǤŽŽƒ”‡–‘’“—ƒ”–‹Ž‡’‡”ˆ‘”‡”•Ǥ
22
History of Egregious Compensation and Lack of Shareholder Alignment Under
the Hasbro Board (Continued)
While CEO compensation for Mattel is also high vs. peers, Mattel’s performance targets have increased meaningfully over
time, while Hasbro’s have been consistently lowered.
•
͸ͷΨ ‘ˆ ƒ––‡Žǯ• ƒ—ƒŽ ƒ•Š ‹ ‡–‹˜‡ ‹• –‹‡† –‘ ‰”‘™–ŠǤ ‘”‡ •‘ –Šƒ ”‡˜‡—‡ǡ ƒ”‰‹• ‘” ˆ”‡‡ ƒ•Š ˆŽ‘™
ȋ ƒ•„”‘ǯ• –ƒ”‰‡–•Ȍǡ ™‡ „‡Ž‹‡˜‡ ‘”‰ƒ‹ ‹• ƒ ‰‘‘†
„ƒ”‘‡–‡” ˆ‘” ‰”‘™–Š ‹ ‹–”‹•‹ ˜ƒŽ—‡ ƒ• ‹– ‹• ‘’ƒ”ƒ–‹˜‡Ž›
†‹ˆˆ‹ —Ž– –‘ ƒ‹’—Žƒ–‡Ǥ
Mattel Annual Executive Compensation Targets
2018
2019
2020
2021
Revenue
̈́ͶǡͷͲ͵ǡͲͲͲ
̈́ͶǡͷͲ͸ǡͲͲͲ
̈́͵ǡͻͺ͹ǡͲͲͲ
̈́Ͷǡͺ͸ͷǡͲͲͲ
y/y %
0%
-12%
22%
Gross Margin EBITDA
ͶͳǤͺͲΨ
ͶʹǤʹͲΨ
ͶͷǤͺͲΨ
ͶͺǤͳͲΨ
̈́ͳʹ͹ǡͲͲͲ
̈́͵ͷͺǡͲͲͲ
̈́ͶͲʹǡͲͲͲ
̈́ͷͳ͸ǡͲͲͲ
y/y %
182%
12%
28%
Hasbro Annual Executive Compensation Targets
2018
2019
2020
2021
Revenue
$5,329,612
̈́Ͷǡ͹ͻͳǡͳ͵ʹ
̈́͸ǡʹͺ͵ǡͲ͹͹
$5,969,053
y/y %
-10%
4%*
-5%
EBIT Margin
ͳͷǤͻͲΨ
ͳͶǤͲͲΨ
ͳͶǤ͹ͲΨ
ͳ͵Ǥ͹ͲΨ
FCF
̈́͸ͳͷǡ͹͵͹
̈́ͷ͵Ͷǡ͹͸ʹ
̈́Ͷ͸͹ǡ͸Ͳ͸
̈́ͶͷͳǡͲͲͲ
y/y %
-13%
-13%
-4%
•
ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘ †”ƒƒ–‹ ƒŽŽ› ‡š ‡‡†‡† ƒ––‡Žǯ• ‹ ʹͳ
†‡•’‹–‡ ƒ•„”‘ǯ• ’‡”ˆ‘”ƒ ‡ –ƒ”‰‡–• „‡‹‰ ‘–‹—‘—•Ž› Ž‘™‡”‡† ƒ†
‹–• •–‘  ’”‹ ‡ •‹‰‹ˆ‹ ƒ–Ž› —†‡”’‡”ˆ‘”‹‰ „‘–Š –Š‡ Ƭ ͷͲͲ ƒ†
ƒ––‡ŽǤ
CEO Compensation
HAS
MAT
HAS (-) MAT
Annual TSR
HAS
MAT
HAS (-) MAT
2019
$17,960,878
$15,514,997
$2,445,881
2020
$16,668,010
$15,623,432
$1,044,578
2021
$23,714,681
$16,128,895
$7,585,786
33.42%
35.60%
-2.18%
-8.40%
28.80%
-37.20%
11.90%
23.70%
-11.80%
We Believe the superior alignment of management and shareholder incentives is demonstrated in both
Mattel’s TSR and fundamental performance.
ȗ‰”‘™–Š”ƒ–‡‹•ƒ†Œ—•–‡†ˆ‘”‡‡̵• ‹‘”‰ƒ‹ ”‡˜‡—‡ ‘–”‹„—–‹‘
‘—” ‡ǣˆ‹Ž‹‰•ǤŽ‘‘„‡”‰Ǥ
23
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰ǤͶ͸ǦͶ͹Ǥ
Poor Disclosure Practices Have Hurt Hasbro’s Valuation
Hasbro’s opaque disclosures under the incumbent Board have, in our view, made it impossible for investors or the market
to understand the Company’s full financial picture.
•
ƒ”‹‘—• †‹• Ž‘•—”‡ ‹••—‡•ǡ ‹ Ž—†‹‰ Ž‹––Ž‡ –”ƒ•’ƒ”‡ › ”‡‰ƒ”†‹‰ —†‡”Ž›‹‰ ‘”‰ƒ‹
‰”‘™–Š ”‡Žƒ–‡† –‘ ƒ “—‹•‹–‹‘• ƒ† –Š‡ ’‡”ˆ‘”ƒ ‡ ‘ˆ ‹†‹˜‹†—ƒŽ „”ƒ†• —†‡” –Š‡
‘•—‡” ƒ† •‡‰‡–• Šƒ˜‡ ƒ†‡ ‹– extremely difficult to assess the strength
of business segments or value them appropriately.
•
Š‡ Šƒ• ƒŽ•‘ –ƒ‡ ‹••—‡ ™‹–Š ƒ•„”‘ǯ• ’‘‘” †‹• Ž‘•—”‡Ǥ  ‡’–‡„‡” ʹͲʹͲǡ –Š‡ •‡– ƒ Ž‡––‡” –‘ ƒ•„”‘ ”‡“—‡•–‹‰ ‘”‡ †‹• Ž‘•—”‡ •—””‘—†‹‰ ”‡ƒ ƒ† ƒ•„”‘ǯ•
‘”‡ ˆ”ƒ Š‹•‡•Ǥ
•
At the heart of its disclosure issue, we believe Hasbro has a cultural problem with
accountability.
•
› ”‡ˆ—•‹‰ –‘ ”‡Ž‡ƒ•‡ ‡› ’‡”ˆ‘”ƒ ‡ ‡–”‹ •ǡ ƒ•„”‘ Šƒ• ƒ†‡ ‹– ‡ƒ”Ž› ‹’‘••‹„Ž‡ ˆ‘”
‹˜‡•–‘”• –‘ Š‘Ž† ƒƒ‰‡‡– ƒ ‘—–ƒ„Ž‡Ǥ
SEC Letter to Hasbro
We note your chart disclosing the change in net revenues by brand
portfolio for each year in the three years ended December 29, 2019. In
the accompanying discussion of the variances, by portfolio, you
identify component product brands and discuss the general impact they
had on the growth, or decline, in net revenues but do not otherwise
quantify their impact. In future filings, please revise your disclosures
to quantify the reasons for the change in order for an investor to discern
the relative contribution of each of the multiple components cited to the
total change. The impacts of material variances in identified
components that offset each other should be separately disclosed,
quantified, and discussed rather than netting them. Please provide us
with examples of your intended disclosures based on current financial
results. Refer to FR-72 for additional guidance.
Shareholders deserve the opportunity to comprehensively evaluate Hasbro while holding
management accountable.
24
The Current Board Has Not Engaged with Alta Fox in Good Faith In Our View
•–‡ƒ†ǡ ƒ•„”‘ ’”‘’‘•‡† Ž–ƒ ‘š ’—„Ž‹ Ž› ‡†‘”•‡ ƒ•„”‘ǯ• †‡ˆ‡•‹˜‡ ƒ††‹–‹‘• ‘ˆ –™‘ ‡™ ‘‹‡‡•
ƒ’’‘‹–‡† „› –Š‡ ‘ƒ”†ǡ ƒ ’”‘ ‡•• ™Š‹ Š —Ž–‹ƒ–‡Ž› ˆƒ‹Ž‡† –‘ ”‡‘˜‡ ƒ› Ž‘‰Ǧ–‡—”‡† †‹”‡ –‘”•Ǥ
Ž–ƒ ‘š ƒ†‡ –™‘ ‘‹‡‡• ƒ˜ƒ‹Žƒ„Ž‡ ˆ‘” ‹–‡”˜‹‡™•Ǥ ƒ–Š‡” –Šƒ ƒ••‡•• –Š‡ “—ƒŽ‹ˆ‹ ƒ–‹‘• ‘ˆ ‘—”
ƒ†‹†ƒ–‡•ǡ –Š‡ ‘ƒ”† –”‹‡† –‘ ‘˜‹ ‡ ‘—” ‘‹‡‡• –Šƒ– ƒ••‘ ‹ƒ–‹‘ ™‹–Š ƒ –‹˜‹• ™‘—Ž† „‡ †‹•ƒ•–”‘—•
ˆ‘” –Š‡‹” ’”‘ˆ‡••‹‘ƒŽ ƒ”‡‡”•Ǥ
Š‡ ‘ƒ”† †‹•‹••‡† ‘’”‘‹•‡ ‹ ˆƒ˜‘” ‘ˆ Š‹”‹‰ ƒ ƒ”› ‘ˆ ‡š’‡•‹˜‡ ƒ†˜‹•‘”• –Šƒ– ‹ Ž—†‡• –™‘ Žƒ™
ˆ‹”•ǡ –™‘ ’”‘š› •‘Ž‹ ‹–ƒ–‹‘ ˆ‹”• ƒ† –™‘ ‹˜‡•–‡– „ƒ• ˆ‘” †‡ˆ‡•‡ •—’’‘”– Ȃ ›‡– ƒ‘–Š‡” ‡šƒ’Ž‡
‘ˆ ‘”’‘”ƒ–‡ ™ƒ•–‡Ǥ
“
By refusing to settle or
take them seriously at all
the mgmt. team is
arguably
confirming
the activists point that
they are an entrenched
and
“family
run”
company/board
that
believes
they
are
“protected” and don’t
care
about
outsider
views.
“
Ž–ƒ ‘š ƒ†‡ ”‡ƒ•‘ƒ„Ž‡ •‡––Ž‡‡– ‘ˆˆ‡”• –‘ ƒ•„”‘ǡ ‹ Ž—†‹‰ ƒ ‘ˆˆ‡” ˆ‘” ‘‡ ‘ˆ Ž–ƒ ‘šǯ•
‹†‡’‡†‡– ‘‹‡‡• ƒ† –Š‡ ˆ‘”ƒ–‹‘ ‘ˆ ƒ ƒ’‹–ƒŽ ƒŽŽ‘ ƒ–‹‘ ‘‹––‡‡ –‘ ‘˜‡”•‡‡ ‹˜‡•–‡–•Ǥ
ƒ•„”‘ ‘– ‘Ž› ”‡ˆ—•‡† Ž–ƒ ‘šǯ• ‘ˆˆ‡”•ǡ „—– ‡˜‡” ‡˜‡ •‡– ƒ ”‡†ǦŽ‹‡ ˜‡”•‹‘ „ƒ  ‘ˆ ƒ› ‘ˆ ‘—” –‡”
•Š‡‡–•Ǥͳ
Ǧ ‡ˆˆ‡”‹‡• ”‘—’ǡƒ” Š͵ͳǡʹͲʹʹ
The fact that the Board decided to drag shareholders into a long, expensive proxy fight instead of settle for a
modest Board refresh and a capital allocation review committee is concerning and, in our view, suggests
extreme levels of entrenchment.
ͳǤ
Š––’•ǣȀȀ™™™Ǥ”‡—–‡”•Ǥ ‘Ȁ„—•‹‡••Ȁ‡š Ž—•‹˜‡ǦŠƒ•„”‘Ǧ•—„•ǦƒŽ–ƒǦˆ‘šǦ„‘ƒ”†Ǧ‘‹‡‡Ǧ‘ˆˆ‡”Ǧ•‡––Ž‡‡–Ǧ–ƒŽ•Ǧ•‘—” ‡•ǦʹͲʹʹǦͲ͵Ǧʹ͹Ȁ
25
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰•ǤͷͲǦͷʹǤ
We Are Seeking to Replace Three Long-Tenured Incumbents
We are seeking to replace the Chairman of the Board, the Chair of the Compensation Committee and the longest-tenured
member of Hasbro’s Board – who previously served as the Chair of the Compensation Committee. In our view, these
incumbents are key parts of the culture of entrenchment and operational mediocrity that pervades Hasbro today.
Rich Stoddart
Lisa Gersh
Chair of Compensation
Committee
Board Tenure: ~12 years
Chairman of the Board
Board Tenure: 8 years
š
”‹‘” –”ƒ  ”‡ ‘”† ‘ˆ •‹‰‹ˆ‹ ƒ– ˜ƒŽ—‡ †‡•–”— –‹‘ǡ
‹ Ž—†‹‰ Ǧ͸ͺǤͶͻΨ ”‡–—” ƒ• ‘ˆ ‡”™‘”‹‰•
ƒ† –Š‡ Ž‘•• ‘ˆ ƒŒ‘” ƒ ‘—–• ƒ• ‘ˆ ‡‘ —”‡––Ǥ
š
’’ƒ”‡– Žƒ  ‘ˆ ƒ’‹–ƒŽ ƒŽŽ‘ ƒ–‹‘ǡ –‡ Š‘Ž‘‰› ƒ†
•–”ƒ–‡‰‹ ’Žƒ‹‰ ‡š’‡”–‹•‡Ǥ
š
—‡•–‹‘ƒ„Ž‡ ƒ’’‘‹–‡– –‘ –Š‡ ‘ƒ”†Ǥ
š
˜‡”•ƒ™ ‘–‹—‡† —†‡”’‡”ˆ‘”ƒ ‡ ƒ• ‹–‡”‹
‘ˆ ƒ•„”‘ǡ ‹ Ž—†‹‰ –Š‡ †‡˜ƒ•–ƒ–‹‰ Ž‘•• ‘ˆ –Š‡
‹•‡› ”‹ ‡••Ȁ ”‘œ‡ ‘–”ƒ – –‘ ƒ––‡ŽǤ
š
ƒ• never „‘—‰Š– •Šƒ”‡• ‘ˆ ƒ•„”‘ •–‘ Ǥ
Edward Philip
š
ƒ• ‘˜‡”•‡‡ ƒ•„”‘ǯ• ‡š ‡••‹˜‡ ƒ†ǡ ‹ ‘—” ˜‹‡™ǡ
—Œ—•–‹ˆ‹ƒ„Ž‡ ‡š‡ —–‹˜‡ ‘’‡•ƒ–‹‘ ’”ƒ –‹ ‡•Ǥ
š
”ƒ  ”‡ ‘”† ‘ˆ ˜ƒŽ—‡ †‡•–”— –‹‘ǡ ‹ Ž—†‹‰ ƒ–
ƒ”–Šƒ –‡™ƒ”– ‹˜‹‰ ‹‡†‹ƒǡ  Ǥ ȋDzƒ”–Šƒ
–‡™ƒ”–dzȌǡ ™Š‹ Š †‡Ž‹˜‡”‡† ƒ Ǧ͵ͲΨ ƒ—ƒŽ‹œ‡†
”‡–—” ˆ‘” •Šƒ”‡Š‘Ž†‡”• †—”‹‰ •Ǥ ‡”•Šǯ• –‹‡
ƒ• ”‡•‹†‡– ƒ† Žƒ–‡” Ǥ
š
‘ƒ”† ‡„‡” ƒ– ‘‡›‹‘ ™Š‹ Š ™‡– ’—„Ž‹
–Š”‘—‰Š ƒ ‹ ʹͲʹͳ ƒ† Šƒ• •‹ ‡ •‡‡ ‹–•
˜ƒŽ—‡ †‡ Ž‹‡ „› ‘˜‡” ͺͷΨ ‹ Ž‡•• –Šƒ ‘‡ ›‡ƒ”Ǥ
š
ƒ• never „‘—‰Š– •Šƒ”‡• ‘ˆ ƒ•„”‘ •–‘ Ǥ
Longest-Tenured Director
Board Tenure: ~20 years
š
ƒ‹Ž‡† –‘ •–‡’ †‘™ ƒ• ’ƒ”– ‘ˆ –Š‡ ‘ƒ”†ǯ• ”‡ ‡–
†‡ˆ‡•‹˜‡
‡š’ƒ•‹‘ǡ
•—‰‰‡•–‹‰
•‡”‹‘—•
‡–”‡ Š‡– ‹••—‡•Ǥ
š
Šƒ‹” ‘ˆ ‘’‡•ƒ–‹‘ ‘‹––‡‡ ˆ”‘ ʹͲͳͶǦ
ʹͲͳͻ ƒ† ‡„‡” •‹ ‡ ʹͲͳͲǡ ‘˜‡”•‡‡‹‰
ƒ•„”‘ǯ• ‡š ‡••‹˜‡ ƒ† —Œ—•–‹ˆ‹ƒ„Ž‡ ‡š‡ —–‹˜‡
‘’‡•ƒ–‹‘ ’”ƒ –‹ ‡•Ǥ
š
—””‡–Ž› •‡”˜‡• ‘ –Š‡ „‘ƒ”†• ‘ˆ ˆ‹˜‡ ‘–Š‡”
‘’ƒ‹‡•ǡ ƒ› ‘ˆ ™Š‹ Š Šƒ˜‡ ƒŽ•‘ •‹‰‹ˆ‹ ƒ–Ž›
—†‡”’‡”ˆ‘”‡† †—”‹‰ Š‹• –‡—”‡•Ǥ
š
ƒ• never „‘—‰Š– •Šƒ”‡• ‘ˆ ƒ•„”‘ •–‘ Ǥ
ͳǤ Š––’•ǣȀȀ™™™Ǥ’”‡••”‡ƒ†‡”Ǥ ‘Ȁ—•ƒȀ Š‹ ƒ‰‘Ǧ•—Ǧ–‹‡•ȀʹͲͲ͹ͲͳͲͻȀʹͺʹͳͶͲ͸ͻ͸ͺͻͺ͹ͻͺ
ʹǤ ‹‹Žƒ”Ž›ǡ–‘††ƒ”–™ƒ••‡”˜‹‰ƒ•‹–‡”‹‘ˆ ƒ•„”‘™Š‡ ƒ•„”‘Ž‘•–‹–••‹‰‹ˆ‹ ƒ–‹•‡›”‹ ‡••Ȁ ”‘œ‡ ‘–”ƒ –•–‘ ƒ––‡Ž
‘—” ‡ǣŽ‘‘„‡”‰ǡˆ‹Ž‹‰•
26
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰•ǤͷͶǦ͸ͳǤ
Our Solution: Highly Qualified and Unaffiliated Candidates
We Believe our nominees will bring independent, skilled perspectives and strong track records of value creation to help
effectively oversee management and collegially work with new CEO Chris Cocks to develop and execute his strategy.
9 ƒ’‹–ƒŽƒŽŽ‘ ƒ–‹‘‡š’‡”–™‹–Šƒ–”ƒ 
”‡ ‘”†‘ˆ†‹• ‹’Ž‹‡†ǡˆ‘ —•‡†‹˜‡•–‡–•
‹ ǯ••—„•‹†‹ƒ”‹‡•Ǥ
9 ‹‰‹ˆ‹ ƒ–‡š’‡”‹‡ ‡‡˜ƒŽ—ƒ–‹‰ƒ†
ƒ ‘’Ž‹•Š‹‰ ‘”’‘”ƒ–‡”‡•–”— –—”‹‰•Ǥ
9 —”‹‰Š‹•ͳͷǦ›‡ƒ”–‡—”‡ƒ• ǡ ȋ‹ Ž—†‹‰ƒŽŽ•’‹Ǧ‘ˆˆ•ȌŠƒ• ‘’‘—†‡†
•Šƒ”‡Š‘Ž†‡”˜ƒŽ—‡ƒ–ʹͷΨƒ›‡ƒ”
‘’ƒ”‡†–‘–Š‡ƬͷͲͲƒ–Ž‡••–ŠƒͳͲΨ
ƒ—ƒŽ‹œ‡†Ǥ
‘—” ‡ǣŽ‘‘„‡”‰ǡˆ‹Ž‹‰•
ǣ͹ΨȋʹͲʹͲǦ’”‡•‡–Ȍ
ǣͺͶΨȋʹͲͳͻǦʹͲʹͲȌ
ǣʹǡͷͶ͵ΨȋʹͲͲ͹Ǧ’”‡•‡–Ȍ
9 Š‹‡ˆ ‹ƒ ‹ƒŽˆˆ‹ ‡”‘ˆ ‘”’‘”ƒ–‹‘
ȋǣ ȌǤ
Rani Hublou
Carolyn Johnson
Marcelo Fischer
Ma
9
‘”‡”Š‹‡ˆ”ƒ•ˆ‘”ƒ–‹‘ˆˆ‹ ‡”‘ˆ
‡”‹ ƒ –‡”ƒ–‹‘ƒŽ ”‘—’ǡ  Ǥȋǣ
Ȍǡ™Š‡”‡Š‡”‡ˆˆ‘”–•”‡•—Ž–‡†‹̱̈́ͳ
„‹ŽŽ‹‘‹ ‘•–•ƒ˜‹‰•Ǥ
9 ”‘˜‡•‹‰‹ˆ‹ ƒ–˜ƒŽ—‡ˆ‘”•Šƒ”‡Š‘Ž†‡”•
†—”‹‰Š‡”„‘ƒ”†–‡—”‡ƒ–ƒŒ‡• ‘ǡ
ȋˆ‘”‡”Ž›ǣ ȌǤ
9 ‹‰‹ˆ‹ ƒ–‡š’‡”‹‡ ‡•—’’‘”–‹‰‡™•
ƒ†ƒŽ‹‰‹‰‹ ‡–‹˜‡•‰‹˜‡ ‘’‡•ƒ–‹‘
‘‹––‡‡‡š’‡”–‹•‡Ǥ
9 ‡†—‹–‹‡•ƒ† †‹˜‹†—ƒŽ‹ˆ‡ƒ–‘›ƒ
‹ƒ ‹ƒŽǡ  ǤȋǣȌǡ‹ Ž—†‹‰‹–•
•ƒŽ‡–‘’‘ŽŽ‘‹ʹͲͳͺˆ‘”̈́ͳǤͳ„‹ŽŽ‹‘Ǥ
9
‘”‡”Š‹‡ˆƒ”‡–‹‰ˆˆ‹ ‡”‘ˆͺšͺǡ  Ǥ
ȋǣ Ȍǡ™Š‡”‡•Š‡Š‡Ž’‡†–Š‡
‰‘Ǧ–‘Ǧƒ”‡–•–”ƒ–‡‰›‹ ”‡ƒ•‡”‡˜‡—‡„›
ʹš‹Š‹‰Š‡•–ƒ”‰‹„—•‹‡••—‹–ƒ†
”‡†— ‡ ‘•–•„›ʹͲΨΪ‹Ž‘™‡•–ƒ”‰‹
„—•‹‡••—‹–Ǥ
9 —””‡–†‹”‡ –‘”‘ˆ‡ •›•  ǤȋǣȌǡ
ƒ•—’’Ž› Šƒ‹•‘ˆ–™ƒ”‡ ‘’ƒ›ǡŠ‡Ž’‹‰
‘˜‡”•‡‡ƒ„—•‹‡••‘†‡Ž•Š‹ˆ–ˆ”‘
’‡”’‡–—ƒŽ–‘•—„• ”‹’–‹‘Ž‹ ‡•‡•ƒŽ‡•Ǥ
9 š’‡”‹‡ ‡•‡––‹‰ƒŽ‹‰‡† ‘’‡•ƒ–‹‘
’‘Ž‹ ‹‡•ƒ•ƒ‡„‡”‘ˆ‡ •›•ǯ
‘’‡•ƒ–‹‘ ‘‹––‡‡Ǥ
27
We Believe Our Nominees Will Bring the Right Skillsets and Expertise to the
Hasbro Boardroom
HAS Board
Tenure
Total
Compensation
from HAS
Appointed
Under
Hassenfeld
Marcelo Fischer
N/A
N/A
N/A
Rani Hublou
N/A
N/A
N/A
Carolyn Johnson
N/A
N/A
N/A
Rich Stoddart
8
$5,325,253
YES
Lisa Gersh
12
$3,925,755
YES
Edward Philip
20
$6,794,241*
YES
Director
History of
Outperformance
at Other Public
Companies?
Buyer of
Hasbro
Common Stock
Capital
Allocation
Expertise
*2003-2005 compensation is not reported in Hasbro’s historical proxy statements. Alta Fox estimated compensation for 2003-2005 by taking an average of 2006 and 2007 compensation.
‘—” ‡ǣˆ‹Ž‹‰•
28
Our Solution: A Vision for Better Governance, Capital Allocation and
Strategic Planning
Establish a Disciplined Capital
Allocation Framework
–”— –—”‡†™‹–Š‡’Šƒ•‹•‘”‡–—”•Ǧ
‘”‹‡–‡†‡–”‹ •–‘‡•—”‡ ƒ’‹–ƒŽˆŽ‘™•
–‘–Š‡Š‹‰Š‡•–”‹•Ǧƒ†Œ—•–‡†”‡–—”
‘’’‘”–—‹–‹‡•Ǥ
Introduce Capital Allocation Discipline
and Strategic Transformation
Experience to Enhance Board’s
Oversight
†‡’‡†‡–ƒ†‡‰ƒ‰‡††‹”‡ –‘”•ƒ –‹‰
–‘ƒš‹‹œ‡˜ƒŽ—‡ˆ‘”ƒŽŽ•Šƒ”‡Š‘Ž†‡”•Ǥ
Improve Disclosure to Ensure
Shareholders Can Properly Evaluate
Hasbro
 ”‡ƒ•‡††‹• Ž‘•—”‡‘ˆ”‡Ž‡˜ƒ– •ˆ‘”
ƒŽŽ‘’‡”ƒ–‹‰•‡‰‡–•ƒ•™‡ŽŽƒ•”‡Ž‡˜ƒ–
‡–”‹ •ˆ‘”ƒ‘— ‡†ƒ “—‹•‹–‹‘•Ǥ
Align Executive Compensation with All
Shareholders
 ”‡ƒ•‡†ƒƒ‰‡‡–ƒ ‘—–ƒ„‹Ž‹–›
™‹–Š ‘’‡•ƒ–‹‘–‹‡†–‘˜ƒŽ—‡Ǧ
‡Šƒ ‹‰‡–”‹ •ǡ”‹‰‘”‘—•–ƒ”‰‡–•ƒ†
–‘–ƒŽ•Šƒ”‡Š‘Ž†‡””‡–—”Ǥ
29
Today’s Agenda
Introduction
Executive Summary
The Case for Boardroom Change
Persistent Strategic Missteps Driving Significant Underperformance
Lack of Relevant Board Skills Hampering Effective Oversight
Our Solution: Highly Qualified, Independent Nominees
Appendix
30
The Current Board Has Overseen Long-Term Underperformance
ƒ•„”‘Šƒ• ‘•‹•–‡–Ž›—†‡”’‡”ˆ‘”‡†„‘–Š–Š‡ƬͷͲͲƒ†‹–• Š‘•‡ ‘•—‡”„‡ Šƒ”‘˜‡”–Š‡Žƒ•–ˆ‹˜‡›‡ƒ”•Ǥ
Hasbro’s Annualized Returns Have Underperformed
ʹͷΨ
ʹͳǤͳΨ
ʹͲΨ
ͳͻǤʹΨ
ͳͺǤʹΨ
ͳͷǤͶΨ
ͳͷǤͲΨ
ͳͷΨ
ͳͳǤ͸Ψ
ͳͲΨ
ͷΨ
͹ǤͲΨ
ʹǤ͹Ψ
ͳǤͻΨ
ͲΨ
ͷǦ‡ƒ”
ƒ•„”‘—ƒŽ‹œ‡†‡–—”
͵Ǧ‡ƒ”
ƬͷͲͲ—ƒŽ‹œ‡†‡–—”
ͳǦ‡ƒ”
—••‡ŽŽͳͲͲͲ‘•—‡”‹• ”‡–‹‘ƒ”› †‡š—ƒŽ‹œ‡†‡–—”
ƒ•„”‘‘–ƒŽŠƒ”‡Š‘Ž†‡”‡–—”ƒŽ›•‹•
5-Year TSR
3-Year TSR
1-Year TSR
Underperformance vs. S&P 500 Annualized Return
-94.6%
-47.1%
-3.8%
Underperformance vs. Russell 1000 Consumer Discretionary Index Annualized Return
-116.8%
-69.4%
9.8%
Source: Bloomberg. HAS and S&P 500 returns assume dividends are reinvested. Data through 2/16/22, the launch date of Alta Fox’s campaign.
31
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹͸Ǥ
The Current Board Has Failed to Stem Long-Term Market Share Losses
•
•
‡•’‹–‡ ‹˜‡•–‹‰ ‘”‡ –Šƒ ̈́ͷ „‹ŽŽ‹‘ ‘˜‡” –Š‡ Žƒ•– ˆ‘—” ›‡ƒ”• ‹
–Š‡ ‘•—‡” „—•‹‡•• ƒ† •’‡†‹‰ •Šƒ”‡Š‘Ž†‡” ƒ’‹–ƒŽ ‘
—‡”‘—•
ƒ “—‹•‹–‹‘•ǡ
Hasbro
has
significantly
underperformed against Mattel since 2019 on both top-line
and bottom-line results.
 ‘—” ˜‹‡™ǡ ƒ•„”‘ǯ• ‘•—‡” „—•‹‡•• Šƒ• —†‡”’‡”ˆ‘”‡† ‘ ƒ
ƒ ”‘ǦŽ‡˜‡Žǡ †‡ Ž‹‹‰ „‘–Š ‹ ”‡˜‡—‡• ƒ† ‡ƒ”‹‰•ǡ ™Š‹Ž‡
‹†—•–”› ”‡–ƒ‹Ž –‘› •ƒŽ‡• Šƒ˜‡ ‰”‘™ ƒ– ̱ͶΨ ‘˜‡” –Š‡ Žƒ•– †‡ ƒ†‡Ǥ
—ƒ”›‘ˆʹͲͳͺǦʹͲʹͳ‡•—Ž–•
Company:
Annualized
Revenue Growth
2018 EBITDA
Margins
2021 EBITDA
Margins
ƒ•„”‘ͳ
-0.9%
12.0%
11.3%
6.5%
1.9%
18.5%
ƒ––‡Ž
Note that these numbers reflect organic revenues of both businesses since 2018.
Hasbro Toy & Games Sales vs Industry Growth2
ͳ͸Ͳ
(Indexed to 100)
ͳͶͲ
Urgent change is neededǣ ‹ –Š‡ Žƒ•– –Š”‡‡ ‘–Š•ǡ
ƒ•„”‘ •ƒ™ ‹•‡› ‘˜‡ –™‘ ‘ˆ ‹–• ‡› Ž‹ ‡•‹‰
‘–”ƒ –• –‘ ƒ––‡Žǡ ”‡•—Ž–‹‰ ‹ –Š‡ Ž‘•• ‘ˆ ‘”‡ –Šƒ
̈́͵ͲͲ ‹ŽŽ‹‘ ‘ˆ ”‡˜‡—‡ ȋ‡ƒ”Ž› ͳͲΨ ‘ˆ ‘•—‡”
”‡˜‡—‡ȌǤ Š‡ Ž‘‰Ǧ–‡” –”‡† ‹• ’‘‘”ǡ „—– ƒ”‡– •Šƒ”‡
Ž‘••‡• ƒ”‡ ƒ ‡Ž‡”ƒ–‹‰Ǥ
ͳʹͲ
ͳͲͲ
ͺͲ
ƒ•„”‘‘•—‡”‡˜‡—‡ȋ‡š Ž—†‹‰ƒ†‡‡Ȍ
‘› †—•–”›ƒŽ‡•ƒ–‡–ƒ‹Ž
ͳǤŽ–ƒ ‘š‡•–‹ƒ–‡•ˆ‘” ‘•—‡”•‡‰‡–ǡ‡š Ž—†‹‰‡‡ ‘–”‹„—–‹‘ǤŠ‹•
†‘‡•‘–ƒ†Œ—•–‘—– ƒ•„”‘ǯ•̈́ͷʹ͵ƒ “—‹•‹–‹‘‘ˆ‘™‡”ƒ‰‡”•Ǥ‡‡ƒ’’‡†‹š
•Ž‹†‡͹ʹˆ‘”‘”‡†‡–ƒ‹Ž•Ǥ
‘—” ‡ǣŽ–ƒ ‘šǡ’—„Ž‹ ˆ‹Ž‹‰•Ǥ
ʹǤŠ‹•ƒƒŽ›•‹•†‘‡•ƒ†Œ—•–ˆ‘”–Š‡̈́͵ͲͲΪ‹’ƒ”–‡”„”ƒ†”‡˜‡—‡ ƒ•„”‘™‹ŽŽ„‡Ž‘•‹‰‹ʹͲʹ͵ˆ‘”‹•‡›”‹ ‡•• ”‘œ‡ǡ
”‘ŽŽ•ǡƒ†‡•ƒ‡‘”•Š‘’ȋ‡ƒ”Ž›ͳͲΨ‘ˆ‘•—‡””‡˜‡—‡•ȌǤ –ƒŽ•‘†‘‡•ƒ†Œ—•–‘—–ˆ‘” ƒ•„”‘ǯ•̈́ͷʹ͵ƒ “—‹•‹–‹‘‘ˆ
‘™‡”ƒ‰‡”•Ǥ‡‡ƒ’’‡†‹š•Ž‹†‡͹Ͳˆ‘”‘”‡†‡–ƒ‹Ž•Ǥ
‘—” ‡ǣǡ—”‘‘‹–‘”
32
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰•Ǥ͸͹Ǧ͸ͻǤ
The Current Board Has a Record of Poor Capital Allocation and M&A
Investment
G.I. Joe Video
Game
Transformers,
Micronauts, Ouija
Board Video
Games
eOne
Date
Announced
Price Paid /
Amount
Spent
Approved by
Targeted
Directors?
Result?
‡”•‘–†‹• Ž‘•‡†Ǥ
ƒ‡ƒ˜ƒŽ—ƒ„Ž‡ ‘•—‡”„”ƒ†
ƒ†–—”‹–‹–‘ƒ˜‹†‡‘‰ƒ‡
’”‘’‡”–›Ǥ
3/3
Likely Value-Destructive.
Š‡ Ǥ Ǥ ‘‡ Šƒ•‘–•— ‡‡†‡†ƒ––Š‡„‘š‘ˆˆ‹ ‡ƒ†
˜‹†‡‘‰ƒ‡•ƒ”‡ƒ‡š–”‡‡Ž› ‘’‡–‹–‹˜‡ ƒ–‡‰‘”›
Šƒ•‘–Šƒ†— Š•— ‡••‹Ǥ
‘–†‹• Ž‘•‡†Ǥ
ȀǤ –‡”ƒŽ
‹˜‡•–‡–Ǥ
•‡”‡•‘—” ‡• –‘ †‡˜‡Ž‘’
‰ƒ‡•ˆ‘” ‹ǦŠ‘—•‡Ǥ
3/3
Likely Value-Destructive.
‹‡™‹–Š Ǥ Ǥ ‘‡ǡ ƒ•„”‘Šƒ•–”‹‡†–‘•“—‡‡œ‡–‘‘— Š
‘—–‘ˆ–‹”‡† ƒ†™‹ŽŽŽ‹‡Ž›Šƒ˜‡’‘‘””‡–—”•‘ˆ ƒ’‹–ƒŽǤ
̈́ͶǤ͸„‹ŽŽ‹‘Ǥ
̱ͳͺš”ƒ‹Ž‹‰™‡Ž˜‡
‘–ŠȋDzdzȌ
Ǥ
‡˜‡Ž‘’•Š‘™•ƒ†‘˜‹‡•‹Ǧ
Š‘—•‡ˆ‘”‡š‹•–‹‰„”ƒ†•Ǥ
‡ŽŽ–‘›•”‡Žƒ–‡†–‘‘™‡”ƒ‰‡”•
ƒ†‡š’ƒ†–Š‡‡†‹ƒ
‘’’‘”–—‹–‹‡•Ǥ
Multiple Paid
Deal Rationale
‡’–‡„‡”
ʹͲʹͳ
̈́ʹͲͲ‹ŽŽ‹‘Ϊ
‘ ‡
ˆ‹‹•Š‡† ‰‹˜‡
„”ƒ†‹‰ǫͳ
‡„”—ƒ”›
ʹͲʹͳ
—‰—•–ʹͲͳͻ
3/3
Value-Destructive.
ƒ•„”‘ǯ••–‘ †‡ Ž‹‡†ͻΨ–Š‡†ƒ›‘ˆ–Š‡†‡ƒŽƒ†‹••–‹ŽŽ
„‡Ž‘™–Š‡’”‡Ǧ†‡ƒŽ’”‹ ‡„‡ ƒ—•‡ ƒ•„”‘•‹‰‹ˆ‹ ƒ–Ž›
‘˜‡”’ƒ‹†Ǥ
Power Rangers
ƒ›ʹͲͳͺ
̈́ͷ͵Ͷ‹ŽŽ‹‘Ǥ
‡”•‘–†‹• Ž‘•‡†ǡ
„—– ‡–‹‘‡†
–Šƒ––Š‡‡ƒ”‹‰•
‹’ƒ –‹ ʹͲͳͺ™‘—Ž†
„‡‹ƒ–‡”‹ƒŽǤ
Transformers
Card Game
ʹͲͳ͹
‘–†‹• Ž‘•‡†Ǥ
ȀǤ –‡”ƒŽ
‹˜‡•–‡–Ǥ
•‡”‡•‘—” ‡•–‘†‡˜‡Ž‘’ƒ
”ƒ•ˆ‘”‡”•–”ƒ†‹‰ ƒ”†‰ƒ‡Ǥ
3/3
Value-Destructive.
ˆ–‡”•’‡†‹‰•‹‰‹ˆ‹ ƒ–‹–‡”ƒŽ”‡•‘—” ‡•–‘†‡˜‡Ž‘’
–Š‡‰ƒ‡ǡ‹–‹•‘Ž‘‰‡”•‘Ž†Ǥ
̈́ͳͳʹ‹ŽŽ‹‘Ǥ
‡”•‘–†‹• Ž‘•‡†ǡ
„—–ƒ ˆŽ‹’ǯ•
‘’‡”ƒ–‹‰’”‘ˆ‹–™ƒ•
‡‰ƒ–‹˜‡‹ʹͲͳͶǤ
‡˜‡Ž‘’‘„‹Ž‡‰ƒ‡•‹ǦŠ‘—•‡Ǥ
2/3*
Value-Destructive.
ƒ•„”‘™”‘–‡–Š‡ƒ “—‹•‹–‹‘†‘™–‘œ‡”‘Ž‡••–Šƒ–Š”‡‡
›‡ƒ”•Žƒ–‡”Ǥ
Backflip
—Ž›ʹͲͳ͵
Source: public filings.
1. Alta Fox estimate based on industry checks for AAA video game budgets
3/3
Value-Destructive.
ƒ•„”‘’ƒ‹†‘”‡–ŠƒŠƒŽˆƒ„‹ŽŽ‹‘ˆ‘”ƒ†‡ƒŽ™‹–Š
‹ƒ–‡”‹ƒŽ‡ƒ”‹‰•‹’ƒ –Ǥ‘™‡”ƒ‰‡”• ‘•—‡”
‹–‡”‡•–Šƒ•†‡ Ž‹‡†•‹ ‡–Š‡†‡ƒŽǤ
*Stoddart was not on the Board when
investment was made
33
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹ͲǤ
Case Study: eOne Acquisition
™Šƒ–™‡„‡Ž‹‡˜‡™ƒ•„‘–Š–Š‡†‡ˆ‹‹‰‘‡–ƒ†–Š‡‰”‡ƒ–‡•–ˆƒ‹Ž—”‡‘ˆ–Š‡Dz”ƒ†Ž—‡’”‹–dz•–”ƒ–‡‰›ǡ ƒ•„”‘ƒ “—‹”‡†‡‡
‹‡ ‡„‡”ʹͲͳͻˆ‘” $4.6 billion, nearly 1/3 of the Company’s entire enterprise value at the time.
•
ƒ•„”‘ ’ƒ‹† ƒ ͵ͳΨ ’”‡‹— –‘ ‡‡ǯ• ’”‡Ǧ†‡ƒŽ •Šƒ”‡ ’”‹ ‡ǡ nearly 18x TTM EBITDA, –‘
ƒ “—‹”‡ ‡‡Ǥ
• ‘ ˆ—† –Š‡ ƒ “—‹•‹–‹‘ǡ ƒ•„”‘ ‹••—‡† ‘”‡ –Šƒ ͳͲ ‹ŽŽ‹‘ •Šƒ”‡• ‘ˆ ‘‘ •–‘ ǡ
diluting shareholders by more than 8%ǡ ƒ† added more than $3 billion of debt –‘ –Š‡
„ƒŽƒ ‡ •Š‡‡–Ǥ
‹ ‡‡‡ ‡ƒŽ
‘— ‡‡–͵
• ‡‡ǯ• ™ƒ• ƒ™ƒ”†‡† ̈́ͳʹ ‹ŽŽ‹‘ ‹ ‡–‹”‡Ž› –‹‡Ǧ„ƒ•‡† ‡“—‹–› ‰”ƒ–• ˆ‘ŽŽ‘™‹‰ –Š‡
‘’Ž‡–‹‘ ‘ˆ –Š‡ ƒ “—‹•‹–‹‘Ǥ
• Hasbro’s shares declined 9% the day the deal was announced ƒ† Šƒ˜‡ ‘–‹—‡† –‘
—†‡”’‡”ˆ‘” •‹ ‡Ǥ
•
•
ƒ•„”‘ Žƒ‹‡† –Šƒ– „› ʹͲʹʹǡ ‡‡ ™‘—Ž† †”‹˜‡ ̈́ͳ͵Ͳ ‹ŽŽ‹‘ ‹ ‹ ”‡‡–ƒŽ ”—Ǧ”ƒ–‡
•›‡”‰‹‡• „‡–™‡‡ ‘•—‡” ƒ† –‡”–ƒ‹‡– Æ ‹•–‡ƒ†ǡ ™‡ ‡•–‹ƒ–‡ that
Consumer and Entertainment EBITDA will have declined by 10% or $79 million over
that period.1
‘”†‹‰ –‘ ƒƒ‰‡‡–ǡ –Š‡ ƒŒ‘”‹–› ‘ˆ –Š‡ ‡‡ •›‡”‰‹‡• Šƒ˜‡ ƒŽ”‡ƒ†› „‡‡ ”‡ƒŽ‹œ‡†Ǥʹ
‹–Š‡” ͳȌ ƒ•„”‘ ‹• Ž›‹‰ ƒ„‘—– –Š‡ •›‡”‰‹‡• ‡š–”ƒ –‡† ˆ”‘ –Š‡ †‡ƒŽ ‘” ʹȌ ‹–• ‘”‡ „—•‹‡••
‹• †‡–‡”‹‘”ƒ–‹‰ ‡˜‡ ˆƒ•–‡” –Šƒ ™‡ –Š‘—‰Š– —†‡” ‹–• Dz”ƒ† Ž—‡’”‹–dz •–”ƒ–‡‰›Ǥ
-8.4%
Ƭ
ͷͲͲ
59.5%
EBITDA by Segment1
Consumer
Entertainment
Corporate and Other
Total EBITDA ex-WOTC
Change in EBITDA ex-WOTC
Decline in EBITDA %
2019
$587
$148
$77
$812
2022E
$607
$141
-$15
$733
-$79
-10%
We believe the costly and ill-advised eOne deal destroyed significant shareholder value.
1. Alta Fox estimates cited in initial Hasbro presentation, including
corporate and other expense.
2. Hasbro Q1 2022 conference call
Source: Bloomberg normalized share price performance, public filings.
3. Source: Bloomberg. Data through 2/16/22
34
Shares Trade at a Punishing Discount to Five-Year Averages
Hasbro’s NTM EV/EBITDA multiple trades at a significant discount to its five-year average of 12.5x, despite WOTC,
Hasbro’s most valuable business, more than doubling its EBITDA contribution to the group over that period.
WOTC EBITDA (as % of HAS Total)
Hasbro’s NTM EV/EBITDA
16
15
50%
46%
14
13
42%
40%
12
11
30%
28%
10
20%
9
8
10%
NTM EV / EBITDA
5-Year Average
0%
2019
2020
2021
Source: Bloomberg. Public filings. Note that Hasbro only disclosed WOTC EBITDA through 2019.
35
Today’s Agenda
Introduction
Executive Summary
The Case for Boardroom Change
Persistent Strategic Missteps Driving Significant Underperformance
Lack of Relevant Board Skills Hampering Effective Oversight
Our Solution: Highly Qualified, Independent Nominees
Appendix
36
The Current Board Apparently Refuses to Face Reality
‡•’‹–‡Ž‘‰Ǧ–‡”—†‡”’‡”ˆ‘”ƒ ‡ǡƒ•‹‰‹ˆ‹ ƒ–™ƒ•–‡‘ˆ•Šƒ”‡Š‘Ž†‡” ƒ’‹–ƒŽƒ†‡‰ƒ–‹˜‡•Šƒ”‡Š‘Ž†‡”ˆ‡‡†„ƒ ǡthe
incumbent Board seemingly refuses to assume accountability for its apparent failings and instead plans to spend $12
million fighting a significant shareholder. 1 We believe:
Š‡ ‘ƒ”† ”‡ˆ—•‡• –‘ –ƒ‡ ƒ ‘—–ƒ„‹Ž‹–› ˆ‘” –Š‡ ˆƒ – –Šƒ– –Š‡ Dz”ƒ† Ž—‡’”‹–dz •–”ƒ–‡‰› Šƒ• ˆƒ‹Ž‡† –‘ †‡Ž‹˜‡” ƒ†‡“—ƒ–‡
˜ƒŽ—‡ ˆ‘” •Šƒ”‡Š‘Ž†‡”• —†‡” ‹–• Ž‡ƒ†‡”•Š‹’Ǥ
Š‡ ‘ƒ”† ”‡ˆ—•‡• –‘ ƒ ‘™Ž‡†‰‡ –Šƒ– –Š‡ Dz”ƒ† Ž—‡’”‹–dz •–”ƒ–‡‰› Šƒ• ˆƒ‹Ž‡† –‘ •Š‘™ ”‡˜‡—‡ ƒ† ‡ƒ”‹‰• ‰”‘™–Š
‹ ƒ•„”‘ǯ• ‘•—‡” „—•‹‡•• ȋ–Š‡ ’”‹‡ „‡‡ˆ‹ ‹ƒ”› ‘ˆ –Š‹• •–”ƒ–‡‰›Ȍ —†‡” ‹–• Ž‡ƒ†‡”•Š‹’Ǥ
Š‡ ‘ƒ”† ”‡ˆ—•‡• –‘ ”‡ ‘‰‹œ‡ –Šƒ– ƒ•„”‘ǯ• ‘Ž› •‹‰‹ˆ‹ ƒ– ‘”‰ƒ‹ ‡ƒ”‹‰• ‰”‘™–Š ‘˜‡” –Š‡ Žƒ•– †‡ ƒ†‡ Šƒ• ‘‡
ˆ”‘ ǡ ™Š‹ Š Šƒ• „‡‡ Š‹†‡”‡† Ȃ ”ƒ–Š‡” –Šƒ Š‡Ž’‡† „› –Š‹• •–”ƒ–‡‰›Ǥ
Š‡ ‘ƒ”† ”‡ˆ—•‡• –‘ ƒ••—‡ ƒ ‘—–ƒ„‹Ž‹–› ˆ‘” ‘”–‰ƒ‰‹‰ ǯ• ƒ•Š ˆŽ‘™ ˆ‘” ‡š’‡•‹˜‡ǡ ˜ƒŽ—‡Ǧ†‡•–”— –‹˜‡
ƒ “—‹•‹–‹‘• –Šƒ– –‘ †ƒ–‡ Šƒ˜‡ ”‡•—Ž–‡† ‹ ‘ „‡‡ˆ‹–• –‘ Ǥ
Shareholders have an opportunity to install new directors with the requisite objectivity, track records of
value creation and relevant skillsets to create enduring value and strengthen Hasbro.
ͳǤ
Š––’•ǣȀȀ™™™Ǥ•‡ Ǥ‰‘˜Ȁ” Š‹˜‡•Ȁ‡†‰ƒ”Ȁ†ƒ–ƒȀͲͲͲͲͲͶ͸ͲͺͲȀͲͲͲͳͳͻ͵ͳʹͷʹʹͳͳ͸͵͹ͳȀ†ʹ͵ͷ͸͸ͳ††‡ˆ ͳͶƒǤŠ–
37
The Current Board Has Overseen Concerning Governance Practices
We believe there are significant governance issues at Hasbro, many of which can be traced back to what appears to be the
Board’s historic prioritization of the Hassenfeld family’s interests over those of shareholders.
Highly Questionable
Chairman (pg. 39)
Lack of Effective Oversight
of Strategy (pg. 45)
Insular, Private Company
Culture (pg. 40)
Insufficient Investor
Disclosure (pg. 46-47)
Misaligned Executive
Compensation (pgs. 41-44)
Unwillingness to
Collaborate with
Shareholders (pg. 48)
Defensive and Reactionary
Board Expansion (pg. 49)
38
Corporate Governance Issue #1: Highly Questionable Chairman
We believe Rich Stoddart is unqualified to be on any public company board – let alone Chairman of Hasbro.
•
•
”Ǥ –‘††ƒ”–ǯ• Žƒ–‡•– ‘’‡”ƒ–‹‰ ”‘Ž‡ ™ƒ• ƒ• ‘ˆ ‡”™‘”‹‰•
ȋˆ‘”‡”Ž› ǣ Ȍǡ ™Š‡”‡ ”‡•—Ž–• —†‡” Š‹• –‡—”‡ ™‡”‡
†‹•ƒ•–”‘—• ˆ‘” •Šƒ”‡Š‘Ž†‡”•Ǥ
Š‹Ž‡ ‹˜‡•–‘”• Ž‘•– ‡ƒ”Ž› ‘˜‡” –™‘Ǧ–Š‹”†• ‘ˆ –Š‡ ˜ƒŽ—‡ ‘ˆ –Š‡‹”
‹˜‡•–‡– ‹ ǡ ”Ǥ –‘††ƒ”– ƒ†‡ ‘”‡ –Šƒ ̈́ͳ͵ ‹ŽŽ‹‘
†—”‹‰ Š‹• •Š‘”– –‡—”‡ ƒ• ƒ† ‡˜‡ ƒ ‡’–‡† ƒ ‰‡‡”‘—•
Šƒ‰‡Ǧ‹Ǧ ‘–”‘Ž „‘—• ™Š‡ –Š‡ ‘’ƒ› ™ƒ• •‘Ž† ƒ– ƒ
†‡’”‡••‡† ’”‹ ‡Ǥ
60
40
20
0
-20
-40
-60
-80
-100
IWNK’s Stock Declined 68.49% During Mr. Stoddart’s Tenure
INWK
•
”Ǥ –‘††ƒ”– ™ƒ• ’”‡˜‹‘—•Ž› ‘ˆ ‡‘ —”‡––ǡ ƒ ƒ†˜‡”–‹•‹‰
ƒ‰‡ ›ǡ ™Š‡”‡ Š‡ ̶’”‡•‹†‡† ‘˜‡” •‘‡ ƒŒ‘”ǡ †‡‘”ƒŽ‹œ‹‰
ƒ ‘—– Ž‘••‡•ǡ ‹ Ž—†‹‰ –Š‡ ǤǤ ”›ǡ ‘”‰ƒ –ƒŽ‡› ƒ†
•‡˜‡”ƒŽ Š—• ‘ˆ ‘ ‰”ƒ „—•‹‡••Ǥdz
•
‡ ‘–‡† ”Ǥ –‘††ƒ”–ǯ• ’”‹ƒ”› “—ƒŽ‹ˆ‹ ƒ–‹‘ ƒ• ƒ ƒ•„”‘
†‹”‡ –‘” ‹• –Šƒ– Š‡ ™ƒ• ‹ –Š‡ •ƒ‡ ͳͻͺͷ ƒ”–‘—–Š ‘ŽŽ‡‰‡
‰”ƒ†—ƒ–‹‰ Žƒ•• ƒ• –Š‡ ˆ‘”‡” ‘ˆ ƒ•„”‘ —†‡” ™Š‘ Š‡ ™ƒ•
ƒ’’‘‹–‡†Ǥ
1. https://www.pressreader.com/usa/chicago-sun-times/20070109/282140696898798
Source: SEC filings. Bloomberg.
S&P 500
39
Corporate Governance Issue #2: Insular, Private Company Culture
For decades, Hasbro has been run like a private company with an insular culture that we believe originated under the
Hassenfeld family’s reign.
‡ ‘–‡† –Š‡ ‘•‡“—‡ ‡• ‘ˆ –Š‹• Dzˆƒ‹Ž›Ǧˆ‹”•–dz ‡–ƒŽ‹–› ƒ”‡ Ž‡ƒ”ǣ
•
ƒ•„”‘ —†‡”’‡”ˆ‘”‡† –Š‡ Ƭ ͷͲͲ „› ‘”‡ –Šƒ ͳͲͲΨ †—”‹‰ ”Ǥ
—†‡”’‡”ˆ‘”‹‰ ƒ––‡Ž „› ‘˜‡” ͵ͶͲΨǤ
ƒ••‡ˆ‡Ž†ǯ• ͳͶǦ›‡ƒ” –‡—”‡ ƒ• ǡ ™Š‹Ž‡ ƒŽ•‘
•
Š‡ ”Ǥ ƒ••‡ˆ‡Ž†̵• –‡—”‡ ‡†‡† ‹ ƒ› ʹͲͲ͵ǡ ƒ•„”‘̵• •Šƒ”‡ ’”‹ ‡ ”‡ƒ‹‡† ‘”‡ –Šƒ ͵ͲΨ „‡Ž‘™ –Š‡ ƒ”‡– ‹’Ž‹‡†
ƒ––‡Ž ‘ˆˆ‡” ’”‹ ‡ ‹ ͳͻͻ͸Ǥ
•
ƒ•„”‘ Šƒ• —†‡”’‡”ˆ‘”‡† –Š‡ Ƭ ͷͲͲ „› ‘”‡ –Šƒ ʹͲͲΨ •‹ ‡ —‡ ʹͲͳͲǡ ™Š‡ –Š‡ ‘ƒ”† ”‡Œ‡ –‡† ”‘˜‹†‡ ‡ “—‹–›
ƒ”–‡”•ǯ ‹–‡”‡•– ‹ ƒ “—‹”‹‰ –Š‡ ‘’ƒ›Ǥͳ
Š‹Ž‡ –Š‡ ƒ••‡ˆ‡Ž† ˆƒ‹Ž› ƒ› ‘ Ž‘‰‡” Š‘Ž† ƒ ‘–”‘ŽŽ‹‰ •–ƒ‡ ‹ ƒ•„”‘ǡ ™‡ „‡Ž‹‡˜‡ ƒ•„”‘̵• „‘ƒ”†”‘‘ •–‹ŽŽ ‘–ƒ‹• –Š‡ •ƒ‡
‹•—Žƒ”ǡ ‘–”‘ŽŽ‡†Ǧ ‘’ƒ› —Ž–—”‡ –‘†ƒ›Ǥ With the exception of the new directors added just weeks ago in response to our
campaign, all current independent Board members were appointed during Mr. Hassenfeld's tenureǤ ƒ•‡† ‘ ‘—” ‹–‡”ƒ –‹‘
™‹–Š –Š‡ ‘ƒ”† –‘ †ƒ–‡ǡ ™‡ Šƒ˜‡ ‘ Ž—†‡† –Šƒ– ‹– Žƒ • –Š‡ ‘„Œ‡ –‹˜‹–› –‘ ’”‘’‡”Ž› ‡˜ƒŽ—ƒ–‡ –Š‡ ‘’ƒ›̵• ’‡”ˆ‘”ƒ ‡ǡ ‰‘˜‡”ƒ ‡
ƒ† ‰‘Ǧˆ‘”™ƒ”† •–”ƒ–‡‰›Ǥ
1. If we assume that Providence Equity Partners would have paid a 30% acquisition premium to take Hasbro private and factor that into our analysis of the Board’s
performance, Hasbro would have underperformed the S&P 500 by almost 300%.
Source: Bloomberg
40
Corporate Governance Issue #3: Misaligned Executive Compensation
ͷǦ‡ƒ” ƒ•„”‘‡”ˆ‘”ƒ ‡˜•Ǥƒ›
Cumulative 5-Year Hasbro Total
Management & Board Compensation
Cumulative 5-Year Hasbro Total CEO
Compensation
Cumulative 5-Year Hasbro Total
Shareholder Return
Cumulative 5-Year S&P 500 Total
Shareholder Return
$78,679,581
14.1%
108.7%
$218,267,017
Hasbro Total Management & Board
Compensation
Hasbro Total CEO Compensation
̈́͵ͲǡͲͲͲǡͲͲͲ
̈́͹ͲǡͲͲͲǡͲͲͲ
̈́ʹͷǡͲͲͲǡͲͲͲ
̈́͸ͲǡͲͲͲǡͲͲͲ
̈́ʹͲǡͲͲͲǡͲͲͲ
̈́ͷͲǡͲͲͲǡͲͲͲ
̈́ͶͲǡͲͲͲǡͲͲͲ
̈́ͳͷǡͲͲͲǡͲͲͲ
̈́͵ͲǡͲͲͲǡͲͲͲ
̈́ͳͲǡͲͲͲǡͲͲͲ
̈́ʹͲǡͲͲͲǡͲͲͲ
̈́ͷǡͲͲͲǡͲͲͲ
̈́ͳͲǡͲͲͲǡͲͲͲ
̈́Ͳ
̈́Ͳ
ʹͲͳ͹
ʹͲͳͺ
ʹͲͳͻ
ʹͲʹͲ
ʹͲʹͳ
ʹͲͳ͹
ʹͲͳͺ
ʹͲͳͻ
ʹͲʹͲ
”‹‘”–‘Ž–ƒ ‘šǯ•
‡‰ƒ‰‡‡–ǡnone
of the current
Directors Šƒ†‡˜‡”
„‘—‰Š–ƒ•‹‰Ž‡
•Šƒ”‡‘ˆ ƒ•„”‘
•–‘ ‘–Š‡‘’‡
ƒ”‡–Ȃ ‹†‹ ƒ–‹‰
ƒ Ž‡ƒ”
‹•ƒŽ‹‰‡–™‹–Š
•—ˆˆ‡”‹‰
•Šƒ”‡Š‘Ž†‡”•Ǥͳ
ʹͲʹͳ
Alta Fox has no confidence in the Board’s ability to align executive compensation with the success of
shareholders and believes the Compensation Committee needs to be meaningfully refreshed.
Source: Proxy filings, Bloomberg. HAS and S&P 500 returns assume dividends are reinvested. Data through 2/16/22, the launch date of Alta Fox’s campaign.
1. Filings show that Michael Burns and Chris Cocks recently purchased shares following our criticism of the Board’s lack of open market purchases.
41
Corporate Governance Issue #3: Misaligned Executive Compensation
(Continued)
Hasbro’s Compensation Committee – chaired by Ms. Gersh – has consistently lowered performance targets despite
declining performance, allowing management compensation to rise while shareholders have suffered.
Annual Executive Compensation Targets
Revenue
y/y %
EBIT Margin
FCF
y/y %
2018
$5,329,612
1%
ͳͷǤͻͲΨ
̈́͸ͳͷǡ͹͵͹
17%
2019
̈́Ͷǡ͹ͻͳǡͳ͵ʹ
-10%
ͳͶǤͲͲΨ
̈́ͷ͵Ͷǡ͹͸ʹ
-13%
2020
̈́͸ǡʹͺ͵ǡͲ͹͹
4%*
ͳͶǤ͹ͲΨ
̈́Ͷ͸͹ǡ͸Ͳ͸
-13%
2021
$5,969,053
-5%
ͳ͵Ǥ͹ͲΨ
̈́ͶͷͳǡͲͲͲ
-4%
ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘™ƒ• 279% Š‹‰Š‡”‹ ʹͳ–Šƒ‹ ͳͺǡ†‡•’‹–‡‘”‰ƒ‹ ”‡˜‡—‡–ƒ”‰‡–•„‡‹‰11.7%
Ž‘™‡”–ŠƒʹͲͳͺŽ‡˜‡Ž•Ǥ
Hasbro 2021 Organic Revenue Target Analysis
2018 Organic Revenue Target
ʹͲʹͳ”‰ƒ‹ ‡˜‡—‡ƒ”‰‡–
$5,329,612
̈́Ͷǡ͹Ͳͺǡ͵Ͷ͸
ȗ‰”‘™–Š”ƒ–‡‹•ƒ†Œ—•–‡†ˆ‘”‡‡̵• ‹‘”‰ƒ‹ ”‡˜‡—‡ ‘–”‹„—–‹‘
‘—” ‡ǣˆ‹Ž‹‰•
Hasbro CEO Comp
Total Compensation
FY18
$8,499,623
ͳͻ
̈́ͳ͹ǡͻ͸Ͳǡͺ͹ͺ
ʹͲ
̈́ͳ͸ǡ͸͸ͺǡͲͳͲ
FY21
$23,714,681
42
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹ͳǤ
Corporate Governance Issue #3: Misaligned Executive Compensation
(Continued)
Hasbro’s CEO position receives the third-highest compensation among peers of immediately similar size, yet the
Company’s three-year cumulative TSR was fourth-lowest in the group.
Hasbro
$26,844,914
37%
Hasbro Rank Out of 31
Companies (High to Low)
Š”‡‡Ǧ‡ƒ”
ʹ͹–Š ‘—–‘ˆ͵ͳ
ʹͳ
‘’
͵”† ‘—–‘ˆ͵ͳ
•‹‰Ž‘‘„‡”‰ǡ™‡”ƒƒ’—„Ž‹ • ”‡‡ˆ‘” ‘•—‡” ‘’ƒ‹‡•–‘
‡šƒ‹‡ ƒ•„”‘ǯ•”‡Žƒ–‹˜‡ ‘’‡•ƒ–‹‘Ǥ
ͳǤ
ʹǤ
͵Ǥ
Bloomberg Screen Criteria:
US listed Consumer Discretionary Subcategories:
‘•—‡”‹• ”‡–‹‘ƒ”›”‘†— –•
‘•—‡”‹• ”‡–‹‘ƒ”›‡–ƒ‹Ž
‘•—‡”‹• ”‡–‹‘ƒ”›Š‘Ž‡•ƒŽ‡
Total FY21 CEO Comp vs 3-Year TSR
(For Peers of Immediately Similar Size)
350%
3-Year Cumulative Total Shareholder Return
Minimum
ͳ•–“—ƒ”–‹Ž‡
ʹ†“—ƒ”–‹Ž‡
͵”†“—ƒ”–‹Ž‡
Maximum
FY21 CEO
Compensation 3-Year TSR
$4,162,400
18%
̈́ͳͲǡͳͳͳǡ͵ʹ͸
͸ͶΨ
̈́ͳ͵ǡͶͳͲǡ͹͹Ͷ
ͳͶͶΨ
̈́ͳ͸ǡ͸ͲͲǡͶͺʹ
ʹͲ͸Ψ
$68,090,432
1117%
POOL
300%
LAD
BBWI
WSM
250%
DHI
TSCO
FBHS
RACE
LKQ
NVR
200%
150%
APTV
MAS
KMX BBY
100%
MHK
AAP GPC
Three-Year S&P
500 TSR of 100%
WHR
PHM
MAT
BURL
ULTA
ROSTBWA
50%
HAS
NWL
VFC
‡ •‘”–‡† –Š‡ ‘—–’—– „› ƒ”‡– ƒ’‹–ƒŽ‹œƒ–‹‘ ƒ† ‘’ƒ”‡† ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘ ƒ† ™‹–Š –Š‡ ͳͷ ‘•—‡” ‘’ƒ‹‡• ‘ˆ ‹‡†‹ƒ–‡Ž›
‰”‡ƒ–‡” •‹œ‡ ƒ† ͳͷ ‘•—‡” ‘’ƒ‹‡• ‘ˆ ‹‡†‹ƒ–‡Ž› •ƒŽŽ‡” •‹œ‡Ǥ
ƒ•„”‘ • ‘”‡† ‹ –Š‡ Š‹‰Š‡•– “—ƒ”–‹Ž‡ ‘ˆ ‘’‡•ƒ–‹‘ǡ „—– –Š‡ ™‘”•–
“—ƒ”–‹Ž‡ ˆ‘” –Š”‡‡Ǧ›‡ƒ” Ǥ
0%
$0
$5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000
FY21 CEO Compensation (USD)
ƒ–‡•ˆ‘”ǣͳʹȀ͵ͳȀʹͲͳͺǦͳʹȀ͵ͳȀʹͲʹͳ
”ƒ’Š”‡‘˜‡• ǡǡǡƒ†ˆ‘”˜‹•—ƒŽ‹œƒ–‹‘’—”’‘•‡•ǤŽŽƒ”‡–‘’“—ƒ”–‹Ž‡’‡”ˆ‘”‡”•Ǥ
43
Corporate Governance Issue #3: Misaligned Executive Compensation
(Continued)
While CEO compensation for Mattel is also high vs. peers, Mattel’s performance targets have increased meaningfully over
time, while Hasbro’s have been consistently lowered.
•
͸ͷΨ ‘ˆ ƒ––‡Žǯ• ƒ—ƒŽ ƒ•Š ‹ ‡–‹˜‡ ‹• –‹‡† –‘ ‰”‘™–ŠǤ ‘”‡ •‘ –Šƒ ”‡˜‡—‡ǡ ƒ”‰‹• ‘” ˆ”‡‡ ƒ•Š ˆŽ‘™
ȋ ƒ•„”‘ǯ• –ƒ”‰‡–•Ȍǡ ™‡ „‡Ž‹‡˜‡ ‘”‰ƒ‹ ‹• ƒ ‰‘‘†
„ƒ”‘‡–‡” ˆ‘” ‰”‘™–Š ‹ ‹–”‹•‹ ˜ƒŽ—‡ ƒ• ‹– ‹• ‘’ƒ”ƒ–‹˜‡Ž›
†‹ˆˆ‹ —Ž– –‘ ƒ‹’—Žƒ–‡Ǥ
Mattel Annual Executive Compensation Targets
2018
2019
2020
2021
Revenue
̈́ͶǡͷͲ͵ǡͲͲͲ
̈́ͶǡͷͲ͸ǡͲͲͲ
̈́͵ǡͻͺ͹ǡͲͲͲ
̈́Ͷǡͺ͸ͷǡͲͲͲ
y/y %
0%
-12%
22%
Gross Margin EBITDA
ͶͳǤͺͲΨ
ͶʹǤʹͲΨ
ͶͷǤͺͲΨ
ͶͺǤͳͲΨ
̈́ͳʹ͹ǡͲͲͲ
̈́͵ͷͺǡͲͲͲ
̈́ͶͲʹǡͲͲͲ
̈́ͷͳ͸ǡͲͲͲ
y/y %
182%
12%
28%
Hasbro Annual Executive Compensation Targets
2018
2019
2020
2021
Revenue
$5,329,612
̈́Ͷǡ͹ͻͳǡͳ͵ʹ
̈́͸ǡʹͺ͵ǡͲ͹͹
$5,969,053
y/y %
-10%
4%*
-5%
EBIT Margin
ͳͷǤͻͲΨ
ͳͶǤͲͲΨ
ͳͶǤ͹ͲΨ
ͳ͵Ǥ͹ͲΨ
FCF
̈́͸ͳͷǡ͹͵͹
̈́ͷ͵Ͷǡ͹͸ʹ
̈́Ͷ͸͹ǡ͸Ͳ͸
̈́ͶͷͳǡͲͲͲ
y/y %
-13%
-13%
-4%
•
ƒ•„”‘ǯ• ‘’‡•ƒ–‹‘ †”ƒƒ–‹ ƒŽŽ› ‡š ‡‡†‡† ƒ––‡Žǯ• ‹ ʹͳ ƒ•
ƒ•„”‘ǯ• ’‡”ˆ‘”ƒ ‡ –ƒ”‰‡–• ™‡”‡ ‘–‹—‘—•Ž› Ž‘™‡”‡† ƒ† †‡•’‹–‡
‹–• •–‘  ’”‹ ‡ •‹‰‹ˆ‹ ƒ–Ž› —†‡”’‡”ˆ‘”‹‰ „‘–Š –Š‡ ƒ”‡– ƒ†
ƒ––‡ŽǤ
CEO Compensation
HAS
MAT
HAS (-) MAT
Annual TSR
HAS
MAT
HAS (-) MAT
2019
$17,960,878
$15,514,997
$2,445,881
2020
$16,668,010
$15,623,432
$1,044,578
2021
$23,714,681
$16,128,895
$7,585,786
33.42%
35.60%
-2.18%
-8.40%
28.80%
-37.20%
11.90%
23.70%
-11.80%
We believe the superior alignment of management and shareholder incentives is demonstrated in both
Mattel’s TSR and fundamental performance.
ȗ‰”‘™–Š”ƒ–‡‹•ƒ†Œ—•–‡†ˆ‘”‡‡̵• ‹‘”‰ƒ‹ ”‡˜‡—‡ ‘–”‹„—–‹‘
‘—” ‡ǣˆ‹Ž‹‰•
44
Corporate Governance Issue #4: Lack of Strategic Oversight
Under the existing Finance Committee, Hasbro’s Board has exhibited consistently poor capital allocation, a lack of
financial discipline and a complete inability to effectively assess the Company’s stale strategy in our view.
—‡”‘—• ˜ƒŽ—‡Ǧ†‡•–”— –‹˜‡ ƒ “—‹•‹–‹‘• –Šƒ– ƒ’’‡ƒ” –‘ Šƒ˜‡ ™ƒ•–‡†
•Šƒ”‡Š‘Ž†‡” ƒ’‹–ƒŽ ƒ† •‡”˜‡† –‘ ˆ—”–Š‡” ‘’Ž‹ ƒ–‡ –Š‡ ‹˜‡•–‘” ƒ””ƒ–‹˜‡Ǥ
ƒ‹Ž—”‡ –‘ ”‡‹˜‡•– ‹ ƒ•„”‘ǯ• „‡•–Ǧ’‡”ˆ‘”‹‰ ƒ••‡– ȋȌǡ ‹•–‡ƒ†
”‡ƒ‹‹‰ Š›’‡”Ǧˆ‘ —•‡† ‘
ƒ•„”‘ǯ• ‘•—‡” ƒ† –‡”–ƒ‹‡–
„—•‹‡••‡•Ǥ
‘‘” •–”ƒ–‡‰‹ ’Žƒ‹‰ Šƒ• ”‡•—Ž–‡† ‹ ƒ •—„‘’–‹ƒŽ ‘”’‘”ƒ–‡ •–”— –—”‡ ƒ†
ƒ •‹‰‹ˆ‹ ƒ– Š‘Ž†‹‰ ‘’ƒ› †‹• ‘—– ‹’Ž‹‡† „› –Š‡ ƒ”‡– ˆ‘” Ǥ
“
Hasbro has a long-established Board Finance Committee,
which assists the Board in overseeing the Company’s annual
and long-term financial plans, capital structure, use of funds,
investments, financial and risk management and proposed
significant acquisitions and other transactions. The Finance
Committee’s mandate is to ensure disciplined capital
allocation and that all capital allocation decisions are in
the best interests of shareholders.
“
‡ Ž‹‹‰ ”‡˜‡—‡Ȁ ‹ ƒ•„”‘ǯ• ‘•—‡” „—•‹‡•• ‘˜‡” –Š‡ ’ƒ•–
†‡ ƒ†‡ †‡•’‹–‡ •‹‰‹ˆ‹ ƒ– ˆ‘ —• ƒ† ”‡‹˜‡•–‡–Ǥ
Ǧ ‘’ƒ›’”‡••”‡Ž‡ƒ•‡†ƒ–‡†’”‹ŽʹͷǡʹͲʹʹ
• ˆ—”–Š‡” ‡˜‹†‡ ‡ ‘ˆ –Š‡ ‘ƒ”†ǯ• –‘‡Ǧ†‡ƒˆ „‡Šƒ˜‹‘”ǡ
ƒ•„”‘ •—‰‰‡•–• ƒ ƒ’‹–ƒŽ ƒŽŽ‘ ƒ–‹‘ ‘‹––‡‡ ‹• ‘–
‡‡†‡† Ȃ ƒ† –Šƒ– ‹–• ˆ— –‹‘ ‹• ƒŽ”‡ƒ†› •‡”˜‡† „› –Š‡
—””‡– ‹ƒ ‡ ‘‹––‡‡Ǥ
45
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹ʹǤ
Corporate Governance Issue #5: Poor Disclosure
If a board and management team wanted to intentionally make it difficult for investors to ascertain true performance and
appropriately value their business, they would likely do some of the following:
Disclosure Issues
Relevant Segment
ͳȌ‘–†‹• Ž‘•‡ˆƒ•–‡•–‰”‘™‹‰ǡŠ‹‰Š‡•–ƒ”‰‹•‡‰‡–—–‹Ž‹–”‡ƒ Š‡•εͶͲΨ‘ˆ Ǥ
•
ʹȌƒ‡—Ž–‹’Ž‡ƒ–‡”‹ƒŽƒ “—‹•‹–‹‘•™Š‹Ž‡”‡ Žƒ••‹ˆ›‹‰’‘”–‹‘•‘ˆ–Š‡‡™„—•‹‡••‡•‹–‘˜ƒ”‹‘—•
‘–Š‡”•‡‰‡–•–‘‘„• —”‡—†‡”Ž›‹‰‘”‰ƒ‹ ”‡•—Ž–•Ǥ
•
‘•—‡”ǡ–‡”–ƒ‹‡–
͵Ȍ‡ˆ—•‡–‘†‹• Ž‘•‡•ƒŽ‡•„›‡›ˆ”ƒ Š‹•‡•ǡƒ‹‰‹–‹’‘••‹„Ž‡ˆ‘”‹˜‡•–‘”•–‘Œ—†‰‡ƒƒ‰‡‡–̵•
•
•— ‡••‹†”‹˜‹‰Ž‘‰Ǧ–‡”sustainable ‰”‘™–ŠǤ
‘•—‡”ǡ
ͶȌŠƒ‰‡•‡‰‡–†‹• Ž‘•—”‡–Š”‡‡–‹‡•‹–Š‡Žƒ•–†‡ ƒ†‡Ǥ
•
ŽŽ•‡‰‡–•
ͷȌ ƒ˜‡ƒ—‡š’Žƒ‹‡† ‘”’‘”ƒ–‡•‡‰‡––Šƒ–•™—‰ˆ”‘ƒŽƒ”‰‡’”‘ˆ‹–’”‡Ǧƒ “—‹•‹–‹‘‹’”‘ˆ‘”ƒ
Š‹•–‘”‹ ƒŽ—„‡”•–‘ƒ‡ƒ‹‰ˆ—ŽŽ‘••’‘•–Ǧƒ “—‹•‹–‹‘Ǥ
•
‘”’‘”ƒ–‡ƒ†‘–Š‡”ƒ†Œ—•–‡† ͸Ȍ’‡†‘˜‡”̈́ͳ„‹ŽŽ‹‘ƒ—ƒŽŽ›‘ ‘–‡–ƒ†˜‹†‡‘‰ƒ‡†‡˜‡Ž‘’‡–™‹–Š‘—–†‹• Ž‘•‹‰™Šƒ–
’”‘Œ‡ –•ƒ”‡„‡‹‰ˆ—†‡†ǡ–Š‡•’Ž‹–„‡–™‡‡‡š’‡•‡†ƒ† ƒ’‹–ƒŽ‹œ‡††‡˜‡Ž‘’‡–ƒ†–Š‡‡š’‡ –‡†
”‡–—”ƒ†–‹‡Ž‹‡‘ˆ‹–‡”ƒŽ’”‘Œ‡ –•Ǥ
•
–‡”–ƒ‹‡–ǡ
Hasbro has done all of the above. Perhaps this has been done intentionally to mask weak underlying organic
performance in Hasbro’s consumer business – the most iconic facet of the Hassenfeld legacy.
46
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹ʹǤ
Corporate Governance Issue #5: Poor Disclosure (Continued)
We view Hasbro's opaque disclosure practices under the incumbent Board as one of the contributing factors to why the
Company trades at a significant discount to its intrinsic value.
The SEC has also taken issue with Hasbro’s poor disclosure.  ‡’–‡„‡” ʹͲʹͲǡ –Š‡ •‡– ƒ Ž‡––‡” –‘
†‹• Ž‘•—”‡ •—””‘—†‹‰ ”‡ƒ ƒ† ƒ•„”‘ǯ• ‘”‡ ˆ”ƒ Š‹•‡•Ǥ
ƒ•„”‘ ”‡“—‡•–‹‰ ‘”‡
‡ ‘–‡ ›‘—” Šƒ”– †‹• Ž‘•‹‰ –Š‡ Šƒ‰‡ ‹ ‡– ”‡˜‡—‡• „› „”ƒ† ’‘”–ˆ‘Ž‹‘ ˆ‘” ‡ƒ Š ›‡ƒ” ‹ –Š‡ –Š”‡‡ ›‡ƒ”• ‡†‡† ‡ ‡„‡” ʹͻǡ ʹͲͳͻǤ  –Š‡ ƒ ‘’ƒ›‹‰ †‹• —••‹‘ ‘ˆ –Š‡ ˜ƒ”‹ƒ ‡•ǡ „›
’‘”–ˆ‘Ž‹‘ǡ ›‘— ‹†‡–‹ˆ› ‘’‘‡– ’”‘†— – „”ƒ†• ƒ† †‹• —•• –Š‡ ‰‡‡”ƒŽ ‹’ƒ – –Š‡› Šƒ† ‘ –Š‡ ‰”‘™–Šǡ ‘” †‡ Ž‹‡ǡ ‹ ‡– ”‡˜‡—‡• but do not otherwise quantify their impactǤ  ˆ—–—”‡
ˆ‹Ž‹‰•ǡ ’Ž‡ƒ•‡ ”‡˜‹•‡ ›‘—” †‹• Ž‘•—”‡• –‘ “—ƒ–‹ˆ› –Š‡ ”‡ƒ•‘• ˆ‘” –Š‡ Šƒ‰‡ ‹ ‘”†‡” ˆ‘” ƒ ‹˜‡•–‘” –‘ †‹• ‡” –Š‡ ”‡Žƒ–‹˜‡ ‘–”‹„—–‹‘ ‘ˆ ‡ƒ Š ‘ˆ –Š‡ —Ž–‹’Ž‡ ‘’‘‡–• ‹–‡† –‘ –Š‡ –‘–ƒŽ
Šƒ‰‡Ǥ Š‡ ‹’ƒ –• ‘ˆ ƒ–‡”‹ƒŽ ˜ƒ”‹ƒ ‡• ‹ ‹†‡–‹ˆ‹‡† ‘’‘‡–• –Šƒ– ‘ˆˆ•‡– ‡ƒ Š ‘–Š‡” •Š‘—Ž† „‡ •‡’ƒ”ƒ–‡Ž› †‹• Ž‘•‡†ǡ quantifiedǡ ƒ† †‹• —••‡† ”ƒ–Š‡” –Šƒ ‡––‹‰ –Š‡Ǥ Ž‡ƒ•‡ ’”‘˜‹†‡
—• ™‹–Š ‡šƒ’Ž‡• ‘ˆ ›‘—” ‹–‡†‡† †‹• Ž‘•—”‡• „ƒ•‡† ‘ —””‡– ˆ‹ƒ ‹ƒŽ ”‡•—Ž–•Ǥ ‡ˆ‡” –‘ Ǧ͹ʹ ˆ‘” ƒ††‹–‹‘ƒŽ ‰—‹†ƒ ‡Ǥ
At the heart of its disclosure issue is that Hasbro has, in our view, a cultural problem with accountability.
•
ƒ•„”‘•’‡–ε̈́ͷͲͲ‹ŽŽ‹‘‘‘™‡”ƒ‰‡”•›‡–”‡ˆ—•‡†–‘–‡ŽŽ‹˜‡•–‘”•‹–•”‡˜‡—‡Ȁ ‘–”‹„—–‹‘ƒ––Š‡–‹‡ǡ‘”‹–•
•—„•‡“—‡– ‘–”‹„—–‹‘–‘‡ƒ”‹‰•’‘™‡”ǡƒ‹‰‹–‹’‘••‹„Ž‡ˆ‘”‹˜‡•–‘”•–‘Š‘Ž†ƒƒ‰‡‡–ƒ ‘—–ƒ„Ž‡Ǥ
Unfortunately, Hasbro’s attitude toward disclosure is not improving.
•
˜‡™‹–Š ƒ•„”‘ǯ•Žƒ–‡•–ƒ “—‹•‹–‹‘‘ˆƬ‡›‘†ˆ‘”̈́ͳͶ͸‹ŽŽ‹‘‹’”‹ŽʹͲʹʹǡ ƒ•„”‘†‹†‘–’”‘˜‹†‡–”ƒ‹Ž‹‰”‡˜‡—‡‘”
ˆ‹‰—”‡•ˆ‘”–Š‡–ƒ”‰‡–ǡ‡š’‡ –‡† ‘–”‹„—–‹‘ˆ‘” ʹʹ‘”‡š’‡ –‡† ‘–”‹„—–‹‘ˆ‘” ʹ͵ǤŠ‡‘’ƒ›‘Ž›†‹• Ž‘•‡†
–Šƒ––Š‡ƒ “—‹•‹–‹‘™‘—Ž†„‡‹ƒ–‡”‹ƒŽ‹ ʹʹƒ†ƒ ”‡–‹˜‡‹ ʹ͵ǤŽƒ‹‹‰–Šƒ–ƒall-cash ‘ˆˆ‡”™‹ŽŽ„‡ƒ ”‡–‹˜‡‘Ž›
‘‡›‡ƒ”ˆ”‘‘™‹•‡„Ž‡ƒ–‹ ‘ˆŠ‘™ ƒ•„”‘ ‘–‹—‡•–‘Ž‡ƒ˜‡‹˜‡•–‘”•‹–Š‡†ƒ”Ǥͳ
1. https://investor.hasbro.com/news-releases/news-release-details/hasbro-acquire-dd-beyond-fandom
Source: SEC filings
47
Corporate Governance Issue #6: Unwillingness to Collaborate with
Shareholders
“
‡ „‡Ž‹‡˜‡ •Šƒ”‡Š‘Ž†‡”• †‡•‡”˜‡ ƒ †‡–ƒ‹Ž‡† ‡š’Žƒƒ–‹‘ ‘ˆ –Š‡ ‘ƒ”†ǯ• ’—”’‘”–‡†
‡˜ƒŽ—ƒ–‹‘ǡ ƒ† the analysis should be re-examined with independent directors
focused on creating shareholder value ”ƒ–Š‡” –Šƒ ’”‡•‡”˜‹‰ –Š‡ ƒ••‡ˆ‡Ž†
ˆƒ‹Ž› Ž‡‰ƒ ›Ǥ
“
On the eve on Alta Fox's debut, HAS was a $97 stock. Today it
gets started $85.50 and that puts it well below where it was
five years ago. Alta Fox may not have a big name in the
activist world, but the company's record is so ordinary that
the company can't just brush this off. To do so would be
awfully cocky (pun intended).
Ǧ ‘”†‘ ƒ•‡––ǡƒ” ŠʹͷǡʹͲʹʹ
“
‡•’‹–‡ •‡ŽŽǦ•‹†‡ ‘—‹–› •—’’‘”– ‘ˆ •‘‡ ‘ˆ Ž–ƒ ‘šǯ• ‹†‡ƒ•ǡ ‹ Ž—†‹‰ –Š‡
’”‹‘”‹–‹œƒ–‹‘ ‘ˆ ǡ Hasbro’s Board swiftly rejected our idea for a financial
or operational spin-off of WOTC without providing the details of its rationale
or analysis with shareholders.
 Ž‹‰Š– ‘ˆ –Š‡ ‘ƒ”†ǯ• ƒ’’ƒ”‡– ”‡†‹„‹Ž‹–› ‹••—‡•ǡ we find it hard to believe that the
Company comprehensively and objectively evaluated strategic alternatives for
the unit.
We think this activist involvement is a win-win. Even if HAS
does not choose a spinoff path at this point, investors' eyes
are now more focused on what the Wizards business means
for HAS long-term - that the higher growth of this super-high
margin business should drive HAS' overall profit margin
higher over time.
Ǧ ǤǤƒ˜‹†•‘Ƭ‘Ǥǡ ‡„ǤͳͺǡʹͲʹʹ
“
Alta Fox’s campaign highlighted the value of WOTC, which was previously
hidden –‘ — Š ‘ˆ –Š‡ ƒ”‡– †—‡ –‘ ƒ•„”‘ǯ• Žƒ  ‘ˆ ’”‘’‡” †‹• Ž‘•—”‡ ‘ –Š‡
•‡‰‡–ǯ• ’‡”ˆ‘”ƒ ‡Ǥ
48
††‹–‹‘ƒŽ‹ˆ‘”ƒ–‹‘‘’‰Ǥ͹ͶǤ
Corporate Governance Issue #7: Defensive, Reactionary Board Expansion
Overview of Key Dates in Alta Fox’s Engagement with Hasbro
Ž–ƒ ‘š•—‰‰‡•–•ƒ
‘‘’‡”ƒ–‹˜‡‘ƒ”†
”‡ˆ”‡•Š‡–ƒ†
‡š’Ž‘”ƒ–‹‘‘ˆƒ•’‹Ǧ
‘ˆˆ‘ˆǤ
‡ ‡„‡”ʹͲʹͳ
‘˜‡„‡”ʹͲʹͳ
Ž–ƒ ‘š”‡’‡ƒ–‡†Ž›
ƒ––‡’–•–‘‡‰ƒ‰‡
‹‡ƒ‹‰ˆ—Ž
•‡––Ž‡‡––ƒŽ•ǡ„—–
ƒ•„”‘”‡ˆ—•‡•–‘
ƒ††ƒ•Šƒ”‡Š‘Ž†‡”Ǧ
‘‹ƒ–‡††‹”‡ –‘”Ǥ
‡„Ǥͳ͸ǡʹͲʹʹ
Ǧ ‡ˆˆ‡”‹‡• ”‘—’ǡƒ” Š͵ͳǡʹͲʹʹ
’”‹ŽͶǡʹͲʹʹ
ƒ” ŠʹͲʹʹ
ƒǤ͹ǡʹͲʹʹ
Ž–ƒ ‘š”‡“—‡•–‡†ƒ‡‡–‹‰
™‹–Š ƒ•„”‘ǯ•‘ƒ”†•‹š
•‡’ƒ”ƒ–‡–‹‡•„‡ˆ‘”‡„‡‹‰
‰”ƒ–‡†ƒ‡‡–‹‰™‹–Š–™‘
†‹”‡ –‘”•–‘†‹• —••‹–•
‘ ‡”•™‹–Š ƒ’‹–ƒŽ
ƒŽŽ‘ ƒ–‹‘ǡ•–”ƒ–‡‰›ƒ†
’‡”ˆ‘”ƒ ‡Ǥ
“
“
Ž–ƒ ‘šŠ‘Ž†•
ƒŽŽ•™‹–Š
ƒ•„”‘ǯ• –‡ƒ
ƒ†ƒƒ‰‡‡–
”‡‰ƒ”†‹‰
•–”ƒ–‡‰›ƒ†
’‡”ˆ‘”ƒ ‡Ǥ
By refusing to settle or take them seriously at all the
mgmt. team is arguably confirming the activists
point that they are an entrenched and “family run”
company/board that believes they are “protected” and
don’t care about outsider views.
Ž–ƒ ‘š
‘‹ƒ–‡•
ƒŽ–‡”ƒ–‡
†‹”‡ –‘”
ƒ†‹†ƒ–‡•Ǥ
‘†ƒ›
ƒ•„”‘‡š’ƒ†•
‹–•‘ƒ”†ˆ”‘ͳͳ
–‘ͳ͵‡„‡”•Ǥ
49
Why We Are Seeking to Remove Chairman Stoddart (8-Year Tenure)
We Believe Chairman Stoddart lacks relevant qualifications and experience to serve on Hasbro’s Board – let alone serve as
interim CEO and Chairman – and has overseen significant value destruction during his tenure.
š Lack of Relevant Expertise: ”Ǥ –‘††ƒ”– Žƒ • ’—„Ž‹
•–”ƒ–‡‰‹ ’Žƒ‹‰ ‡š’‡”–‹•‡Ǥ
‘’ƒ› „‘ƒ”† ‡š’‡”‹‡ ‡ ƒ† ƒ’‹–ƒŽ ƒŽŽ‘ ƒ–‹‘ǡ –‡ Š‘Ž‘‰› ƒ†
š Track Record of Value Destruction: • ‘ˆ ‡”™‘”‹‰•ǡ ”Ǥ –‘††ƒ”– ‘˜‡”•ƒ™ ƒ ͸ͺǤͶͻΨ •Šƒ”‡ ’”‹ ‡ †‡ Ž‹‡ ™Š‹Ž‡
‘ŽŽ‡ –‹‰ ‘”‡ –Šƒ ̈́ͳ͵ ‹ŽŽ‹‘ ‹ ‘’‡•ƒ–‹‘ ‹ ƒ††‹–‹‘ –‘ ƒ ‰‡‡”‘—• ‘–”‘Ž „‘—• ™Š‡ –Š‡ ‘’ƒ› ™ƒ• •‘Ž† ƒ– ƒ
†‡’”‡••‡† ’”‹ ‡Ǥ
š Lack of Independence: ”Ǥ –‘††ƒ”–ǯ• ’”‹ƒ”› “—ƒŽ‹ˆ‹ ƒ–‹‘ ™Š‡ Š‡ ™ƒ• ƒ’’‘‹–‡† –‘ –Š‡ ‘ƒ”† ƒ’’‡ƒ”• –‘ Šƒ˜‡ „‡‡ –Šƒ– Š‡
™ƒ• ‹ –Š‡ •ƒ‡ ͳͻͺͷ ƒ”–‘—–Š ‘ŽŽ‡‰‡ ‰”ƒ†—ƒ–‹‰ Žƒ•• ƒ• –Š‡ ˆ‘”‡” ‘ˆ ƒ•„”‘ —†‡” ™Š‘ Š‡ ™ƒ• ƒ’’‘‹–‡†Ǥ
š Insufficient Ownership: ”Ǥ –‘††ƒ”–ǡ Ž‹‡ ‡˜‡”› ‘–Š‡” ‹†‡’‡†‡– ‹ —„‡– ’”‹‘” –‘ Ž–ƒ ‘šǯ• ‹˜‘Ž˜‡‡–ǡ Šƒ• ‡˜‡”
’—” Šƒ•‡† •Šƒ”‡• ‘ˆ ƒ•„”‘ ‘ –Š‡ ‘’‡ ƒ”‡–ǡ †‡‘•–”ƒ–‹‰ ƒ Žƒ  ‘ˆ ƒŽ‹‰‡– ™‹–Š •Šƒ”‡Š‘Ž†‡”•Ǥ
š Apparent Arrogance: ”Ǥ –‘††ƒ”– Šƒ• ƒ†‡ –Š‡ †‹•ƒ’’‘‹–‹‰ Š‘‹ ‡ –‘ Ž‡ƒ† ƒ•„”‘ ‹–‘ ƒ ‡š’‡•‹˜‡ ƒ† †‹•–”ƒ –‹‰ ’”‘š›
ˆ‹‰Š– ƒ– –Š‡ ‘—–•‡– ‘ˆ ”Ǥ ‘ •ǯ –‡—”‡ǡ ”ƒ–Š‡” –Šƒ Ž‹•–‡ –‘ •Šƒ”‡Š‘Ž†‡”• ƒ† ‡‰‘–‹ƒ–‡ ‹ ‰‘‘† ˆƒ‹–Š ™‹–Š Ž–ƒ ‘š –‘ ”‡ƒ Š ƒ
”‡ƒ•‘ƒ„Ž‡ ‘’”‘‹•‡Ǥ ‡ „‡Ž‹‡˜‡ ”Ǥ –‘††ƒ”–ǯ• ƒ””‘‰ƒ ‡ Šƒ• ‹ˆ‡ –‡† –Š‡ ”‡•– ‘ˆ –Š‡ ‘ƒ”† ƒ† ‡‡†• –‘ „‡ ”‡‘˜‡† ˆ”‘
–Š‡ „‘ƒ”†”‘‘ –‘ ‰‹˜‡ ”Ǥ ‘ • ƒ Šƒ ‡ –‘ •— ‡‡† ƒ† •‡– –Š‡ ˆ‘—†ƒ–‹‘ ˆ‘” ƒ ‡™ ƒ† ‹’”‘˜‡† ‘ƒ”† —Ž–—”‡Ǥ
‘—” ‡ǣˆ‹Ž‹‰•ǤŽ‘‘„‡”‰Ǥ
50
Why We Are Seeking to Remove Ms. Gersh (12-Year Tenure)
As Chair of the Compensation Committee, We believe Ms. Gersh is directly responsible for Hasbro’s excessive and
unjustifiable executive compensation practices amid chronic underperformance and dismal shareholder returns.
š Ineffective Directorship: – ‹• Ž‡ƒ” –‘ —• –Šƒ– •Ǥ ‡”•Š Žƒ • –Š‡ ‘„Œ‡ –‹˜‹–› ƒ† †‹• ‹’Ž‹‡ –‘ ‡ˆˆ‡ –‹˜‡Ž› ‘˜‡”•‡‡ ƒƒ‰‡‡–
‰‹˜‡ –Šƒ– ƒƒ‰‡‡–ǯ• ’‡”ˆ‘”ƒ ‡ –ƒ”‰‡–• Šƒ˜‡ „‡‡ ‘•‹•–‡–Ž› Ž‘™‡”‡† †‡•’‹–‡ Š”‘‹ —†‡”’‡”ˆ‘”ƒ ‡ ƒ† †‹•ƒŽ
•Šƒ”‡Š‘Ž†‡” ”‡–—”•Ǥ
š Track Record of Value Destruction: —”‹‰ •Ǥ ‡”•Šǯ• –‡—”‡ ƒ• ”‡•‹†‡– ƒ† Žƒ–‡” ǡ ƒ”–Šƒ –‡™ƒ”– †‡Ž‹˜‡”‡† ƒ ‡‰ƒ–‹˜‡
͵ͲΨ ƒ—ƒŽ‹œ‡† ”‡–—” ˆ‘” •Šƒ”‡Š‘Ž†‡”•Ǥ Š‡ ‹• —””‡–Ž› ‘ –Š‡ ‘ƒ”† ‘ˆ ƒ ’‘‘”Ž› ’‡”ˆ‘”‹‰ ǡ ‘‡›‹‘  Ǥǡ ™Š‹ Š Šƒ•
”‡–—”‡† ǦͺͶΨ –‘ •Šƒ”‡Š‘Ž†‡”• •‹ ‡ ‹ ʹͲʹͲǤ
š History of Poor Decision-Making: —”‹‰ Š‡” –‡—”‡ ƒ– ƒ”–Šƒ –‡™ƒ”–ǡ •Ǥ ‡”•Š ƒ’’‡ƒ”• –‘ Šƒ˜‡ ˆ‘” ‡† –Š‡ ‘’ƒ› ‹–‘
‘Ǧ ‘’Ž‹ƒ ‡ ™‹–Š ƒ ›ǯ• „› ƒŽŽ‘™‹‰ ‡š Ž—•‹˜‡ ’”‘†— –• –‘ ƒŽ•‘ „‡ •‘Ž† ƒ– ‡‡›Ǥ ƒ ›ǯ• •—‡† –Š‡ ‘’ƒ› ƒ† Ž‹–‹‰ƒ–‹‘
™ƒ• ‘– ”‡•‘Ž˜‡† —–‹Ž ʹͲͳ͹Ǥʹ
š Insufficient Ownership: •Ǥ ‡”•Šǡ Ž‹‡ ‡˜‡”› ‘–Š‡” ‹†‡’‡†‡– ‹ —„‡– ’”‹‘” –‘ Ž–ƒ ‘šǯ• ‹˜‘Ž˜‡‡–ǡ Šƒ• ‡˜‡”
’—” Šƒ•‡† •Šƒ”‡• ‘ˆ ƒ•„”‘ ‘ –Š‡ ‘’‡ ƒ”‡–ǡ †‡‘•–”ƒ–‹‰ ƒ ƒ’’ƒ”‡– Žƒ  ‘ˆ ƒŽ‹‰‡– ™‹–Š •Šƒ”‡Š‘Ž†‡”•Ǥ
ͳǤ Š––’•ǣȀȀ™™™Ǥ•‡ Ǥ‰‘˜Ȁ” Š‹˜‡•Ȁ‡†‰ƒ”Ȁ†ƒ–ƒȀͲͲͲͳͲ͸ʹʹͻʹȀͲͲͲͳͳͶͶʹͲͶͳͲͲ͵͸ͷͳͶȀ˜ͳͺͻͺ͹͹̴ͺǤŠ–
ʹǤ Š––’•ǣȀȀ™™™Ǥ”‡—–‡”•Ǥ ‘Ȁƒ”–‹ Ž‡Ȁ—•ǦŒ Ǧ’‡‡›Ǧƒ ›Ǧ•Ǧƒ”–Šƒ•–‡™ƒ”–Ǧ•‡––Ž‡Ȁƒ ›•ǦŒǦ Ǧ’‡‡›Ǧ•‡––Ž‡Ǧƒ”–ŠƒǦ•–‡™ƒ”–ǦŽ‹–‹‰ƒ–‹‘Ǧ‹†ͳͷ ʹ
‘—” ‡ǣˆ‹Ž‹‰•ǤŽ‘‘„‡”‰Ǥ
51
Why We Are Seeking to Remove Mr. Philip (19-Year Tenure)
We believe it is time for Mr. Philip, the longest-serving Board member, to finally move on following years of financial
underperformance and a seemingly ineffective stint as Chair of the Compensation Committee.
š Excessively Long Tenure: ”Ǥ Š‹Ž‹’ Šƒ• •‡”˜‡† ‘ –Š‡ ‘ƒ”† ˆ‘” ‡ƒ”Ž› ʹͲ ›‡ƒ”•ǡ ‘ŽŽ‡ –‡† ε̈́ͷǤͻ ‹ ‘’‡•ƒ–‹‘ǡ ƒ† ™ƒ• ‘
–Š‡ ‘ƒ”† †—”‹‰ ƒ•„”‘ǯ• •™‹ˆ– †‹•‹••ƒŽ ‘ˆ ”‘˜‹†‡ ‡ “—‹–› ƒ”–‡”• ‹ ʹͲͳͲǤ ‹˜‡ Š‹• Ž‘‰ –‡—”‡ǡ ‹– ‹• Šƒ”† –‘ ‹ƒ‰‹‡ –Š‡
‘ƒ”† Šƒ• ‘– ƒŽ”‡ƒ†› ‰‘––‡ –Š‡ „‡‡ˆ‹– ‘ˆ ”Ǥ Š‹Ž‹’ǯ• ‹•‹‰Š–• ƒ† ‡š’‡”‹‡ ‡Ǥ ‡ „‡Ž‹‡˜‡ ‹– ‹• ™‡ŽŽ ’ƒ•– –‹‡ ˆ‘” Š‹ –‘ ‘˜‡ ‘Ǥ
š Inability to Effectively Oversee Management: • ƒ ‡„‡” ‘ˆ –Š‡ ‘’‡•ƒ–‹‘ ‘‹––‡‡ ˆ‘” ‘˜‡” ƒ †‡ ƒ†‡ǡ ™‡ „‡Ž‹‡˜‡ ”Ǥ
Š‹Ž‹’ ‹• ”‡•’‘•‹„Ž‡ ˆ‘” ƒ•„”‘ǯ• ʹͲͳͶ •ƒ›Ǧ‘Ǧ’ƒ› ˆƒ‹Ž—”‡ ƒ† –Š‡ ‘’ƒ›ǯ• ”‹•‹‰ ‡š‡ —–‹˜‡ ƒ† ‘ƒ”† ‘’‡•ƒ–‹‘ ƒ‹†
—†‡”’‡”ˆ‘”‹‰ ”‡–—”•Ǥ
š Lack of Apparent Focus on Hasbro: ‡ “—‡•–‹‘ Š‘™ ”Ǥ Š‹Ž‹’ ‹• ‡˜‡ ƒ„Ž‡ –‘ ˆ‘ —• ‘ ƒ•„”‘ ‰‹˜‡ –Šƒ– Š‡ —””‡–Ž› •‡”˜‡•
‘ –Š‡ „‘ƒ”†• ‘ˆ ˆ‹˜‡ ‘–Š‡” ‘’ƒ‹‡•ǡ ‹ Ž—†‹‰ ƒ ’‘‘”Ž› ’‡”ˆ‘”‹‰ ǡ Žƒ†‡ ‹” ‘„‹Ž‹–›  Ǥ ȋǣ Ȍ ƒ† –Š‡
—†‡”’‡”ˆ‘”‹‰ ‹–‡† ‹”Ž‹‡• ȋǣ ȌǤ
š Insufficient Ownership: ”Ǥ Š‹Ž‹’ǡ Ž‹‡ ‡˜‡”› ‘–Š‡” ‹†‡’‡†‡– ‹ —„‡– ’”‹‘” –‘ Ž–ƒ ‘šǯ• ‹˜‘Ž˜‡‡–ǡ Šƒ• ‡˜‡”
’—” Šƒ•‡† •Šƒ”‡• ‘ˆ ƒ•„”‘ ‘ –Š‡ ‘’‡ ƒ”‡–ǡ †‡‘•–”ƒ–‹‰ ƒ Žƒ  ‘ˆ ƒŽ‹‰‡– ™‹–Š •Šƒ”‡Š‘Ž†‡”•Ǥ
š Apparent Entrenchment: Š‡ ˆƒ – –Šƒ– ”Ǥ Š‹Ž‹’ǡ ™Š‘ ‹• ™‘‡ˆ—ŽŽ› ‘˜‡”Ǧ–‡—”‡† „› ƒ› ”‡ƒ•‘ƒ„Ž‡ •–ƒ†ƒ”†ǡ ƒ’’‡ƒ”• –‘ Šƒ˜‡
„‡‡ —™‹ŽŽ‹‰ –‘ •–‡’ †‘™ ƒ• ’ƒ”– ‘ˆ ƒ•„”‘ǯ• †‡ˆ‡•‹˜‡ ‘ƒ”† ”‡ˆ”‡•Š ƒˆ–‡” •’‡†‹‰ –™‘ †‡ ƒ†‡• ‘ –Š‡ ‘ƒ”† •—‰‰‡•–•
•‡”‹‘—• ‡–”‡ Š‡– ‹••—‡•Ǥ
‘—” ‡ǣˆ‹Ž‹‰•ǤŽ‘‘„‡”‰Ǥ
52
Today’s Agenda
Introduction
Executive Summary
The Case for Boardroom Change
Persistent Strategic Missteps Driving Significant Underperformance
Lack of Relevant Board Skills Hampering Effective Oversight
Our Solution: Highly Qualified, Independent Nominees
Appendix
53
Our Solution: A Highly Qualified, Independent Slate
We believe our nominees possess the right skills and experience to turn around Hasbro’s ineffective strategy,
underperformance and poor corporate governance.
Marcelo
M
l Fischer
Fi h
Carolyn Johnson
9 ƒ’‹–ƒŽ ƒŽŽ‘ ƒ–‹‘ ƒ† ˆ‹ƒ ‹ƒŽ ‡š’‡”–‹•‡Ǥ
9 —„Ž‹
‘’ƒ› ‡š’‡”‹‡ ‡Ǥ
9 ”ƒ  ”‡ ‘”† ‘ˆ ƒ‹‰ †‹• ‹’Ž‹‡†ǡ
ˆ‘ —•‡† ‹˜‡•–‡–• ‹ ǯ• ƒ›
†‹ˆˆ‡”‡– •—„•‹†‹ƒ”› ‘’ƒ‹‡•Ǥ
9 ‘”’‘”ƒ–‡ •–”— –—”‡ ‡š’‡”– ™‹–Š •’‹Ǧ‘ˆˆ
‡š’‡”‹‡ ‡ ƒ† ƒ —‡Ǥ
9 ”ƒ  ”‡ ‘”† ‘ˆ ˜ƒŽ—‡
’—„Ž‹ ƒ”‡–•Ǥ
”‡ƒ–‹‘ ‹ –Š‡
9 —•‹‡•• –”ƒ•ˆ‘”ƒ–‹‘ ƒ†
‰‘˜‡”ƒ ‡ ‡š’‡”–‹•‡Ǥ
9
‘”–—‡ ͷͲͲ ’—„Ž‹
‡š’‡”‹‡ ‡Ǥ
‘’ƒ›
Rani Hublou
‘”’‘”ƒ–‡
Ǧ•—‹–‡
9 —„Ž‹ ‘’ƒ› ‘’‡•ƒ–‹‘ ƒ† ƒ—†‹–
‘‹––‡‡ ‡š’‡”‹‡ ‡Ǥ
9
‹•–‘”› ‘ˆ ‡š‡ —–‹‰ •‡˜‡”ƒŽ •— ‡••ˆ—Ž
‘’Ž‡š –”ƒ•ƒ –‹‘• –‘–ƒŽ‹‰ „‹ŽŽ‹‘• ‘ˆ
†‘ŽŽƒ”•Ǥ
9 ”ƒ  ”‡ ‘”† ‘ˆ ˜ƒŽ—‡ ”‡ƒ–‹‘Ǥ
Chief Financial Officer, IDT Corporation (NYSE:
IDT)
Former Chief Transformation Officer of American
International Group, Inc. (NYSE: AIG) & Chief
Executive Officer of Annuities and Individual Life
at Voya Financial, Inc. (NYSE: VOYA)
9 –”ƒ–‡‰‹ ’Žƒ‹‰ ‡š’‡”–‹•‡Ǥ
9 ‹‰‹ˆ‹ ƒ– •—’’Ž› Šƒ‹ ƒ† –‡ Š‘Ž‘‰›
‘™Ž‡†‰‡ǡ ‹ Ž—†‹‰ ƒƒǤ
9 ”‘˜‡ ‘”’‘”ƒ–‡ Ž‡ƒ†‡” ™‹–Š ‡š’‡”‹‡ ‡
†”‹˜‹‰ ”‡˜‡—‡ ‰”‘™–Š ƒ† ”‡†— ‹‰ ‘•–•Ǥ
9 —„Ž‹ ‘’ƒ› ‘’‡•ƒ–‹‘ ‘‹––‡‡
‡š’‡”‹‡ ‡Ǥ
9 —„• ”‹’–‹‘Ǧ„ƒ•‡†
–”ƒ•‹–‹‘ ‡š’‡”–‹•‡Ǥ
‘†‡Ž
”‡˜‡—‡
9 ”ƒ  ”‡ ‘”† ‘ˆ ˜ƒŽ—‡ ”‡ƒ–‹‘Ǥ
Former Chief Marketing Officer of 8x8, Inc.
(NASDAQ: EGHT) & Chief Product Officer at
Comprehend Systems, Inc.
54
We Believe Our Nominees Will Bring the Right Skillsets and Expertise to the
Hasbro Boardroom
HAS Board
Tenure
Total
Compensation
from HAS
Appointed
Under
Hassenfeld
Marcelo Fischer
N/A
N/A
N/A
Rani Hublou
N/A
N/A
N/A
Carolyn Johnson
N/A
N/A
N/A
Rich Stoddart
8
$5,325,253
YES
Lisa Gersh
12
$3,925,755
YES
Edward Philip
20
$6,794,241*
YES
Director
History of
Outperformance
at Other Public
Companies?
Buyer of
Hasbro
Common Stock
Capital
Allocation
Expertise
*2003-2005 compensation is not reported in Hasbro’s historical proxy statements. Alta Fox estimated compensation for 2003-2005 by taking an average of 2006 and 2007 compensation.
‘—” ‡ǣˆ‹Ž‹‰•
55
Marcelo Fischer Bio
The Alta Fox Slate
Marcelo Fischer has a strong background in disciplined capital allocation, corporate finance, strategic transactions and the
consumer and technology sectors.
• —””‡–Ž› –Š‡ Š‹‡ˆ ‹ƒ ‹ƒŽ ˆˆ‹ ‡” ‘ˆ ‘”’‘”ƒ–‹‘ ȋDz dzȌ ȋǣ Ȍǡ ƒ —Ž–‹ƒ–‹‘ƒŽ ’”‘˜‹†‡” ‘ˆ Ž‘—† ‘—‹ ƒ–‹‘•
ƒ† ˆ‹ƒ ‹ƒŽ •‡”˜‹ ‡•ǡ ƒ† Šƒ• ƒŽ•‘ •‡”˜‡† ƒ• –Š‡ ‘ˆ ‡Ž‡ ‘ •‹ ‡ —‡ ʹͲͲ͹Ǥ —”‹‰ ”Ǥ ‹• Š‡”ǯ• –‡—”‡ ƒ• ǡ ȋ‹ Ž—•‹˜‡ ‘ˆ ƒŽŽ •’‹Ǧ‘ˆˆ –”ƒ•ƒ –‹‘•Ȍ Šƒ• ‘’‘—†‡† •Šƒ”‡Š‘Ž†‡” ˜ƒŽ—‡ ƒ– ʹͷΨ ƒ ›‡ƒ” ‘’ƒ”‡† –‘ –Š‡ Ƭ ͷͲͲ ƒ– Ž‡•• –Šƒ
ͳͲΨ ƒ—ƒŽ‹œ‡†Ǥ
• ‘–‹—‡• –‘ ’Žƒ› ƒ ‡› ”‘Ž‡ ‹ —Ž‘ ‹‰ •Šƒ”‡Š‘Ž†‡” ˜ƒŽ—‡ ƒ– ™‹–Š •‡˜‡”ƒŽ •— ‡••ˆ—Ž •’‹Ǧ‘ˆˆ• ‡š‡ —–‡† Š‹•–‘”‹ ƒŽŽ› ƒ– ƒ† –™‘ ‡™ •’‹Ǧ‘ˆˆ• —””‡–Ž› ‹ –Š‡ ™‘”•Ǥ ’‘”–ƒ–Ž›ǡ ”Ǥ ‹• Š‡” Šƒ• „‡‡ ‹•–”—‡–ƒŽ ‹ ’”‘‘–‹‰ ‹˜‡•–‘”
–”ƒ•’ƒ”‡ › ƒ ”‘•• ‘’Ž‹ ƒ–‡† ƒ† —”‡Žƒ–‡† „—•‹‡•• •‡‰‡–• ™Š‹Ž‡ ƒ– Ǥ
• ‡ ‡‹˜‡† ƒ ǤǤ ‹ ‘‘‹ • ˆ”‘ –Š‡ ‹˜‡”•‹–› ‘ˆ ƒ”›Žƒ† ƒ† ƒ ǤǤǤ ‹ ‹ƒ ‡ ˆ”‘ –Š‡ ‡™ ‘” ‹˜‡”•‹–› –‡”
Š‘‘Ž ‘ˆ —•‹‡••Ǥ
• We believe Mr. Fischer’s significant capital allocation experience, cost discipline and demonstrated track record of
value creation in public markets through optimizing corporate structures and promoting investor transparency make
him highly qualified to help solve the existing challenges at Hasbro.
‘—” ‡ǣˆ‹Ž‹‰•ǤŽ‘‘„‡”‰Ǥ
56
Endorsements for Mr. Fischer
“
“
I have come to admire Marcelo’s integrity,
trustworthiness and incredible work ethic.
Because of his personal qualities and financial
expertise, he has become a trusted and
indispensable leader within our management
team. Marcelo would be an invaluable addition to
any Board.
Marcelo is an exceptional leader adept at identifying
strategic opportunities, making tough decisions, and
rigorously executing to achieve common goals. He does
all of this in a positive way – building consensus and
forging new alliances to get the job done. In that
regard, he is particularly well-suited for a Board that
wishes to drive strategic change while building longterm value.
“
“
‘™ƒ”† ‘ƒ•Ȃ ‘—†‡”ƒ†Šƒ‹”ƒ‘ˆ ‘”’‘”ƒ–‹‘ȋǣ Ȍ
“
Marcelo’s corporate management and governance
expertise have been honed during his three-plus
decades of public company financial progression and
leadership. His capital allocation insights and
unwavering commitment to financial discipline are
tools that he leverages to create value across a wide
range of strategic landscapes.
‘Ǥ ‹‘—”–‡”Ȃ ˆ‘—•‡Ž‘ˆƒ˜‡”›ǡ‡Ž˜ƒ‰‰‹ǡ
„”‘‹–‹• Ƭ‘Š‡ǡǡˆ‘”‡”‹ ‡ǦŠƒ‹”ƒ‘ˆ
‡‹‡‡”‰›ȋǣ Ȍƒ†ˆ‘”‡”ǤǤ
‘‰”‡••ƒ
“
–‡’Š‡ ”‘••Ȃ ”—•–‡‡ƒ†‡„‡”‘ˆ ˜‡•–‡–
‘‹––‡‡‘ˆ Ƭ‡ƒŽ•–ƒ–‡ ˜‡•–‡–”—•–
ȋ ǤǣȌƒ†‹”‡ –‘”‘ˆ”‘••‹˜‡”ƒ 57
Carolyn Johnson Bio
The Alta Fox Slate
Carolyn Johnson has a proven track record delivering shareholder value through her experience as a business
transformation leader and corporate governance expert with compensation committee and asset sale experience.
• • ƒ †‹”‡ –‘” ‘ˆ ƒŒ‡• ‘ǡ ȋˆ‘”‡”Ž› ǣ Ȍǡ •Š‡ ‘˜‡”•ƒ™ ƒ ͺͶΨ ƒ—ƒŽ‹œ‡† –‘–ƒŽ •Šƒ”‡Š‘Ž†‡” ”‡–—”Ǥ •Ǥ ‘Š•‘
Š‡Ž’‡† ‡‰‘–‹ƒ–‡ –Š‡ —Ž–‹ƒ–‡ •ƒŽ‡ ’”‹ ‡ ‘ˆ ƒŒ‡• ‘ –‘ Š‘ƒ ”ƒ˜‘ǡ ™Š‹ Š ‹’”‘˜‡† ˆ”‘ ̈́ͳ͵ǤͳͲ –‘ ̈́ͳ͸ǤͲͲǡ ƒ ‰”‡ƒ–‡” –Šƒ
ͳͲͲΨ ’”‡‹— –‘ ƒŒ‡• ‘ǯ• ’”‡Ǧ†‡ƒŽ –”ƒ†‹‰ ’”‹ ‡Ǥ Š‡ ƒŽ•‘ •‡”˜‡† ‘ ƒŒ‡• ‘̵• ‘’‡•ƒ–‹‘ ‘‹––‡‡Ǥ
• ‡ ‡–Ž› •‡”˜‡† ƒ• –Š‡ Š‹‡ˆ ”ƒ•ˆ‘”ƒ–‹‘ ˆˆ‹ ‡” ‘ˆ ‡”‹ ƒ –‡”ƒ–‹‘ƒŽ ”‘—’ǡ  Ǥ ȋǣ Ȍǡ ƒ ‹–‡”ƒ–‹‘ƒŽ
‹•—”ƒ ‡ ‘”‰ƒ‹œƒ–‹‘ ™Š‡”‡ •Š‡ ‡‰ƒ‰‡† ™‹–Š •Šƒ”‡Š‘Ž†‡”• ‘ ƒ ƒ –‹‘ƒ„Ž‡ ‰‘Ǧˆ‘”™ƒ”† ’Žƒǡ ”‡•—Ž–‹‰ ‹ ̈́ʹͷͲ ‹ŽŽ‹‘ ‘ˆ
‘•– •ƒ˜‹‰• ‹ –Š‡ ˆ‹”•– ‡‹‰Š– ‘–Š• ƒ† †‡˜‡Ž‘’‹‰ ƒ ”‘ƒ†ƒ’ –‘ ̈́ͳ „‹ŽŽ‹‘ ‹ •ƒ˜‹‰• ‘˜‡” ƒ –Š”‡‡Ǧ›‡ƒ” ’‡”‹‘†Ǥ
• ”‡˜‹‘—•Ž› Š‡Ž† –Š‡ ’‘•‹–‹‘ ‘ˆ Š‹‡ˆ š‡ —–‹˜‡ ˆˆ‹ ‡” ‘ˆ —‹–‹‡• ƒ† †‹˜‹†—ƒŽ ‹ˆ‡ ƒ– ‘›ƒ ‹ƒ ‹ƒŽǡ  Ǥ ȋǣ Ȍǡ ƒ
‹•—”ƒ ‡ ‘’ƒ›Ǥ ˆ–‡” Ž‡ƒ†‹‰ –Š‡ †‹˜‹•‹‘ ˆ‘” ˆ‘—” ›‡ƒ”•ǡ •Ǥ ‘Š•‘ Ž‡† ‹–• •ƒŽ‡ –‘ ’‘ŽŽ‘ ‹ ʹͲͳͺ ˆ‘” ̈́ͳǤͳ „‹ŽŽ‹‘Ǥ
• Š”‘—‰Š‘—– Š‡” ƒ”‡‡”ǡ •Ǥ ‘Š•‘ Šƒ• •— ‡••ˆ—ŽŽ› ‘ŽŽƒ„‘”ƒ–‡† ™‹–Š ƒ† •—’’‘”–‡† ‡™ ƒ† ‹ ‘‹‰ •Ǥ
• ‡ ‡‹˜‡† ƒ ǤǤ ‹ —•‹‡•• †‹‹•–”ƒ–‹‘ ™‹–Š ƒ ˆ‘ —• ‹ ‹ƒ ‡ ˆ”‘ ƒŽ‹ˆ‘”‹ƒ –ƒ–‡ ‹˜‡”•‹–›ǡ ‘• ‰‡Ž‡• ƒ† ‘’Ž‡–‡†
–Š‡ ‹ƒ ‡ ˆ‘” ‡‹‘” š‡ —–‹˜‡• ‘—”•‡ ƒ– ƒ”˜ƒ”† —•‹‡•• Š‘‘ŽǤ
• We believe Ms. Johnson’s relentless focus on creating shareholder value, director and operator experience, corporate
governance and compensation expertise, and success executing complex transactions and transformations, would
provide significant value to the Board in light of its strategic execution and governance failures to date.
‘—” ‡ǣˆ‹Ž‹‰•ǤŽ‘‘„‡”‰Ǥ
58
Endorsements for Ms. Johnson
“
“
As a relatively new CEO at that time, I found her
experience in the C-Suite very helpful. She was a
supportive, inquisitive and positive member of
the board. She collaborated well with senior
management and the rest of the board, which
helped our success at a critical juncture.
Carolyn has experience in transformational leadership,
a straightforward and collegial communications style,
and strong interpersonal skills. Carolyn worked directly
with me on the Compensation Committee (which I
chaired) as we developed new executive compensation
systems, assimilated a new CEO and sought to change
the corporate culture from a services orientation to an
innovative software product delivery team.
“
“
“
During a time of great change, her actions led to
many successful decisions that created value for
the company. […] Carolyn had, and continues to
have, the unique ability to build collaborative
solutions--focused on coming together as a team-to help drive improvements that ultimately
benefited the company, employees and clients.
‘„‡•–”‡’‘Ȃ ˆ‘”‡”†‹”‡ –‘”‘ˆƒŒ‡• ‘ȋˆ‘”‡”Ž›
ǣ Ȍƒ†ˆ‘”‡”Šƒ‹”ƒǡŠ‹‡ˆš‡ —–‹˜‡
ˆˆ‹ ‡”ƒ†”‡•‹†‡–‘ˆ–ƒ–‡—–‘ •—”ƒ ‡
‘’ƒ‹‡•
“
†ƒŽ•–‡” Ȃ Š‹‡ˆš‡ —–‹˜‡ˆˆ‹ ‡”‘ˆ
ƒŒ‡• ‘ȋˆ‘”‡”Ž›ǣ Ȍ
Š”‹•–‹‡ —”–•‡ŽŽ‡”• Ȃ Š‹‡ˆš‡ —–‹˜‡ˆˆ‹ ‡”‘ˆ‘›ƒ
˜‡•–‡–ƒƒ‰‡‡–
59
Rani Hublou Bio
The Alta Fox Slate
Rani Hublou is a proven corporate leader with vast experience in strategic planning – including overseeing subscriptionbased revenue model transitions – product innovation, supply chain management, corporate governance, and marketing.
•
‘”‡” Š‹‡ˆ ƒ”‡–‹‰ ˆˆ‹ ‡” ‘ˆ ͺšͺǡ  Ǥ ȋǣ Ȍǡ Š‹‡ˆ ”‘†— – ˆˆ‹ ‡” ‘ˆ ‘’”‡Š‡† ›•–‡•ǡ  Ǥ ƒ† Š‹‡ˆ
ƒ”‡–‹‰ ˆˆ‹ ‡” ƒ† ƒŽ‡• š‡ —–‹˜‡ ƒ– ›•–‡•ǡ  Ǥ ȋƒ “—‹”‡† „› –‡”ƒ–‹‘ƒŽ —•‹‡•• ƒ Š‹‡• ȋǣ ȌȌǤ
• • Š‡ƒ† ‘ˆ ͺšͺǯ• ‰‘Ǧ–‘Ǧƒ”‡– •–”ƒ–‡‰›ǡ •Š‡ Š‡Ž’‡† ‹ ”‡ƒ•‡ ”‡˜‡—‡ „› ʹš ‹ Š‹‰Š‡•– ƒ”‰‹ „—•‹‡•• —‹– ƒ† ”‡†— ‡ ‘•–• „›
ʹͲΨΪ ‘ Ž‘™‡•– ƒ”‰‹ „—•‹‡•• —‹–Ǥ
• – ›•–‡•ǡ •Š‡ –”ƒ•ˆ‘”‡† –Š‡ ‘’ƒ› ˆ”‘ ‘Ǧ’”‡‹•‡ –‘ ƒ ƒƒ ‘†‡Žǡ ‹ ”‡ƒ•‡† ”‡˜‡—‡ „› ͶͲš ƒ† †‡Ž‹˜‡”‡† ͳͲͲš
‘ˆ ˜ƒŽ—ƒ–‹‘ ˆ”‘ •–ƒ”– –‘ ‹–• ‡˜‡–—ƒŽ •ƒŽ‡ –‘ Ǥ
•
‘”‡” •–”ƒ–‡‰‹
‘•—Ž–ƒ– ƒ– ‹•‡› Ƭ ‘’ƒ›ǡ  Ǥǡ ƒ Ž‡ƒ†‹‰ ƒƒ‰‡‡– ‘•—Ž–‹‰ ˆ‹”Ǥ
• ‹”‡ –‘” ‘ˆ ‡ •›•  Ǥ ȋǣ Ȍǡ ƒ •—’’Ž› Šƒ‹ ƒƒ‰‡‡– •‘ˆ–™ƒ”‡ ‘’ƒ›ǡ ™Š‡”‡ •Š‡ ‹• ‘˜‡”•‡‡‹‰ ƒ „—•‹‡•• ‘†‡Ž
–”ƒ•ˆ‘”ƒ–‹‘ ˆ”‘ ’‡”’‡–—ƒŽ –‘ •—„• ”‹’–‹‘ Ž‹ ‡•‡ •ƒŽ‡•Ǥ •Ǥ —„Ž‘— ƒŽ•‘ •‡”˜‡• ‘ –Š‡ ‘’‡•ƒ–‹‘ ‘‹––‡‡ ƒ† Šƒ•
ƒŽ‹‰‡† ƒƒ‰‡‡– ’‡”ˆ‘”ƒ ‡ –ƒ”‰‡–• ƒ ‘”†‹‰ –‘ ‡ •›•ǯ –”ƒ•ˆ‘”ƒ–‹‘ ‰‘ƒŽ•Ǥ
• ‡ ‡‹˜‡† ƒ ǤǤ ƒ† ƒ ǤǤ ‹ †—•–”‹ƒŽ ‰‹‡‡”‹‰ ˆ”‘ –ƒˆ‘”† ‹˜‡”•‹–›Ǥ
• We believe Ms. Hublou’s deep strategy experience in areas such as transitioning businesses to subscription-based
revenue models and navigating complex supply chains would add significant value to the Board given Hasbro’s
complex supply chain and numerous DTC subscription opportunities within its core franchises.
‘—” ‡ǣˆ‹Ž‹‰•ǤŽ‘‘„‡”‰Ǥ
60
Endorsements for Ms. Hublou
“
“
Grasping the big picture, needing to understand
the “Why?”, drilling down on the marketing
strategy and measurable results is what Rani
does best. […] her overall grasp of the business
game plan makes her feedback, questions, and
ideas highly valued by our CEO and senior
management.
In my 27 years as a venture capitalist, Rani is one of the
very few marketing executives I’ve worked with who
truly understands marketing at a deep, strategic level.
She has an uncanny ability to truly understand
customers and what drives them emotionally, which is
really the key. Rani is also exceptional at putting her
finger on the core issues that drive repeatable growth
and being able to clearly articulate them.
“
“
“
[…] I can attest to her strong analytical mindset
and go to market expertise. My direct experience
is that she leads collaboratively and with
integrity. Her strategic perspectives on complex
business models and depth of operational
expertise are ideal for a public company board.
‡–‡”‹‡Š Ǧ ƒ”–‡”ƒ†‘Ǧ ‘—†‡”‘ˆ
‹‰Š–•’‡‡†‡–—”‡ƒ”–‡”•
“
ƒ˜‹†”‡”‡–‘Ǧ š‡ —–‹˜‡Šƒ‹”ƒ‘ˆ
‡ •›•ǡ  Ǥȋǣ Ȍ
‡ƒ–ƒ‰ƒ•™ƒ› Ȃ Š‹‡ˆƒ”‡–‹‰ˆˆ‹ ‡”‘ˆ
‹–‡Ž‡–™‘”•‘”’‘”ƒ–‹‘
61
Our Solution: A Vision for Better Governance, Capital Allocation and Strategic
Planning
Establish a Disciplined Capital
Allocation Framework
–”— –—”‡†™‹–Š‡’Šƒ•‹•‘”‡–—”•Ǧ
‘”‹‡–‡†‡–”‹ •–‘‡•—”‡ ƒ’‹–ƒŽˆŽ‘™•
–‘–Š‡Š‹‰Š‡•–”‹•Ǧƒ†Œ—•–‡†”‡–—”
‘’’‘”–—‹–‹‡•Ǥ
Introduce Capital Allocation Discipline
and Strategic Transformation
Experience to Enhance Board’s
Oversight
†‡’‡†‡–ƒ†‡‰ƒ‰‡††‹”‡ –‘”•ƒ –‹‰
–‘ƒš‹‹œ‡˜ƒŽ—‡ˆ‘”ƒŽŽ•Šƒ”‡Š‘Ž†‡”•Ǥ
Improve Disclosure to Ensure
Shareholders Can Properly Evaluate
Hasbro
 ”‡ƒ•‡††‹• Ž‘•—”‡‘ˆ”‡Ž‡˜ƒ– •ˆ‘”
ƒŽŽ‘’‡”ƒ–‹‰•‡‰‡–•ƒ•™‡ŽŽƒ•”‡Ž‡˜ƒ–
‡–”‹ •ˆ‘”ƒ‘— ‡†ƒ “—‹•‹–‹‘•Ǥ
Align Executive Compensation with All
Shareholders
 ”‡ƒ•‡†ƒƒ‰‡‡–ƒ ‘—–ƒ„‹Ž‹–›
™‹–Š ‘’‡•ƒ–‹‘–‹‡†–‘˜ƒŽ—‡Ǧ
‡Šƒ ‹‰‡–”‹ •ǡ”‹‰‘”‘—•–ƒ”‰‡–•ƒ†
–‘–ƒŽ•Šƒ”‡Š‘Ž†‡””‡–—”Ǥ
62
Vote the GOLD Proxy Card for Change
Shareholders can support fresh, highly qualified perspectives in the boardroom and strengthen Hasbro by voting on the
GOLD proxy card to elect Alta Fox’s independent nominees at the 2022 Annual Meeting.
GOLD Ǥ Ǥ
63
Today’s Agenda
Introduction
Executive Summary
The Case for Boardroom Change
Persistent Strategic Missteps
Poor Governance Practices
Our Solution: Highly Qualified, Independent Nominees
Appendix
64
1996: Mattel Offers to Buy the Business
 ƒ—ƒ”›ͳͻͻ͸ǡƒ––‡Ž‘ˆˆ‡”‡†–‘„—› ƒ•„”‘‹ƒƒŽŽǦ‡“—‹–›–”ƒ•ƒ –‹‘ˆ‘”ƒ73% premiumǤƒ–Š‡”–Šƒ”‡ ‘‰‹œ‹‰‹‡†‹ƒ–‡
˜ƒŽ—‡ˆ‘”•Šƒ”‡Š‘Ž†‡”•ǡ”Ǥ ƒ••‡ˆ‡Ž†”‡Œ‡ –‡†–Š‡‘ˆˆ‡”ǤŠ‡”Ǥ ƒ••‡ˆ‡Ž†ǯ•–‡—”‡ƒ•‡†‡†‹ʹͲͲ͵ǡ ƒ•„”‘ǯ••–‘ ™ƒ•
more than 30% below ƒ––‡Žǯ•ͳͻͻ͸‘ˆˆ‡”’”‹ ‡ǡ”‡•—Ž–‹‰‹•‹‰‹ˆ‹ ƒ–˜ƒŽ—‡†‡•–”— –‹‘ˆ‘” ƒ•„”‘ǯ••Šƒ”‡Š‘Ž†‡”•Ǥ
•
•
ƒ–Š‡” –Šƒ –ƒ‹‰ –Š‡ „‡•– ƒ –‹‘ ˆ‘” •Šƒ”‡Š‘Ž†‡”• ƒ†
ƒ ‡’–‹‰ –Š‡ ‹‡†‹ƒ–‡ǡ ˜ƒŽ—‡Ǧ‡Šƒ ‹‰ ‘ˆˆ‡” ˆ”‘ ƒ––‡Žǡ ”Ǥ
ƒ••‡ˆ‡Ž† “—‹ Ž› ”‡Œ‡ –‡† –Š‡ ‘ˆˆ‡” ‘ ˆ”‹˜‘Ž‘—• ƒ–‹–”—•–
‰”‘—†•Ǥ
‘”†‹‰ –‘ ƒ––‡Žǯ• ǡ ƒ•„”‘ —•‡† Dz• ‘” Š‡† ‡ƒ”–Š –ƒ –‹ •dz
–‘ ”‡Œ‡ – –Š‡ †‡ƒŽǡ ’‡”•—ƒ†‹‰ Š‘†‡ •Žƒ† Ž‡‰‹•Žƒ–‘”• Dz–‘ ’ƒ•• ƒ
Žƒ™Ǧƒ‹‰ –ƒ‡‘˜‡” ƒ––‡’–• ‘”‡ †‹ˆˆ‹ —Ž–Ǥdz
•
Š‡ ƒ••‡ˆ‡Ž†Ǧ‹•’‹”‡† Žƒ™ ’”‡˜‡–‡† ‘™‡”• ‘ˆ ͳͲΨ ‘”
‘”‡ ‘ˆ ƒ ‘’ƒ›ǯ• •–‘  –‘ ƒŽŽ ƒ •’‡ ‹ƒŽ ‡‡–‹‰ ‘ˆ
•Šƒ”‡Š‘Ž†‡”•Ǥͳ
Hasbro vs. S&P 500
Indexed to 100
300
250
200
150
100
50
0
S&P 500
HAS
Hasbro’s total shareholder return from 1996-2003 failed to reach 73%.
1. Bloomberg Business News U.S. Page One: Feb 2, 1996
65
2010: Dismissal of Providence Equity Partners
 —‡ʹͲͳͲǡ”‘˜‹†‡ ‡“—‹–›ƒ”–‡”•ƒ’’”‘ƒ Š‡† ƒ•„”‘ǯ•‘ƒ”†™‹–Š‹–‡”‡•–‹ƒ “—‹”‹‰–Š‡„—•‹‡••Ǥ ‡ƒ‰ƒ‹ǡ—†‡” ”Ǥ
ƒ••‡ˆ‡Ž†ǯ•‹ˆŽ—‡ ‡ǡ–Š‡‘ƒ”†”‡Œ‡ –‡†–Š‡•—‹–‘”ǡ”‡•—Ž–‹‰‹•‹‰‹ˆ‹ ƒ–˜ƒŽ—‡†‡•–”— –‹‘ˆ‘”•Šƒ”‡Š‘Ž†‡”•ƒ• ƒ•„”‘ǯ••–‘ 
™‡–‘–‘—†‡”’‡”ˆ‘”–Š‡ƬͷͲͲ„›‘”‡–ŠƒʹͲͲΨǤ
•
‘– ‘Ž› †‹† ƒ•„”‘ ”‡„—ˆˆ ”‘˜‹†‡ ‡ “—‹–› ƒ”–‡”•ǡ „—–
—Ž–‹’Ž‡ ƒ ‘—–• •—‰‰‡•– –Šƒ– –Š‡ ‘ƒ”† ™ƒ• —™‹ŽŽ‹‰ –‘ •‡ŽŽ
–Š‡ „—•‹‡•• ˆ‘” ƒ› ’”‹ ‡ Ȃ ƒ Ž‡ƒ” ˜‹‘Žƒ–‹‘ ‘ˆ ”Ǥ ƒ••‡ˆ‡Ž†ǯ•
ͳͻͻ͸ ’Ž‡†‰‡ –‘ †‘ ”‹‰Š– „› •Šƒ”‡Š‘Ž†‡”•Ǥͳ
Hasbro vs. S&P 500
Indexed to 100 Assuming No Premium
600
500
400
•
‡” ‘› ‡™• –‡”ƒ–‹‘ƒŽǣ “According to CNBC, sources have
confirmed for them that there is zero chance a deal will occur
between Hasbro and the firm Providence Equity Partners. The
firm did approach Hasbro approximately 6 weeks ago about a
possible deal, which in turn was declined by Hasbro's
board. According to some sources, a deal will NEVER be
considered and that there is nothing to yesterday's story from
the WSJ about talks going on for a possible leverage buyout.”2
ͳǤ
ʹǤ
300
200
100
0
S&P 500
HAS
Hasbro has underperformed the S&P 500 by more than
200% since Providence Equity Partners approached the
Company about a buyout.
Š––’•ǣȀȀ–‘›‡™•‹Ǥ ‘Ȁ‡™•Ǥ’Š’ǫ‹–‡‹†αͳ͸Ͳ͵ͷ
Š––’•ǣȀȀ™™™Ǥƒ”‡–™ƒ– ŠǤ ‘Ȁ•–‘”›ȀŠƒ•„”‘Ǧ•ƒ›•Ǧ‘–Ǧ‹–‡”‡•–‡†Ǧ‹Ǧ•‡ŽŽ‹‰Ǧ ‘’ƒ›ǦʹͲͳͲǦͲ͸Ǧʹ
66
Case Study: Power Rangers Acquisition
•
ƒ•„”‘ ƒ “—‹”‡† –Š‡ ‘™‡” ƒ‰‡”• ‹ —‡ ʹͲͳͺ
ˆ”‘ ƒ„ƒ ”ƒ†•ǡ –Š‡ ”‡ƒ–‘” ‘ˆ ‘™‡” ƒ‰‡”•Ǥ
• Š‡ –”ƒ•ƒ –‹‘ ™ƒ• ˜ƒŽ—‡† ƒ– ̈́ͷ͵Ͷ ‹ŽŽ‹‘ǡ ™Š‹ Š
‹ Ž—†‡† –Š‡ ‹••—ƒ ‡ ‘ˆ ̈́ʹ͹Ͳ ‹ŽŽ‹‘ ‘ˆ ‘‘
•–‘  ȋ̱͵Ǥͳ ‹ŽŽ‹‘ •Šƒ”‡•ǡ ‘” ̱ʹǤͷΨ ‘ˆ –Š‡
‘—–•–ƒ†‹‰ •Šƒ”‡•ȌǤ
• ‡•’‹–‡ –Š‡ •‹œ‡ ‘ˆ –Š‡ –”ƒ•ƒ –‹‘ǡ ƒ•„”‘ †‹† ‘–
†‹• Ž‘•‡ ƒ› ˆ‹ƒ ‹ƒŽ ‡–”‹ • ”‡Žƒ–‡† –‘ –Š‡
ƒ “—‹•‹–‹‘ ‘”ǡ •’‡ ‹ˆ‹ ƒŽŽ›ǡ ‘™‡” ƒ‰‡”•Ǥ
•
 –Š‡ ˆ‹”•– ˆ—ŽŽ ›‡ƒ” ‘ˆ ‘™‡”•Š‹’ ȋʹͲͳͻȌǡ –Š‡ ƒ•„”‘
”‡’‘”–‹‰ •‡‰‡– –Šƒ– ‹ Ž—†‡† ‘™‡” ƒ‰‡”•
ȋ‡”‰‹‰ ”ƒ†•Ȍ ”‡’‘”–‡† ƒ Ž‡•• –Šƒ ̈́ʹͲ ‹ŽŽ‹‘
ƒ—ƒŽ ”‡˜‡—‡ ‹ ”‡ƒ•‡Ǥ
• Š‹• ‹• ƒ‘–Š‡” ‡šƒ’Ž‡ ‘ˆ ‡š–”‡‡Ž› ’‘‘” ‹˜‡•–‘”
†‹• Ž‘•—”‡ ƒ† ‹•ǡ ‹ ‘—” ˜‹‡™ǡ ”‡ˆŽ‡ –‹˜‡ ‘ˆ ƒ ‘ƒ”†
–Šƒ– ƒ”‡• Ž‹––Ž‡ ˆ‘” ‹–• •Šƒ”‡Š‘Ž†‡”•Ǥ
• This leads us to believe that Hasbro paid a
significant price for Power Rangers, which
generated an insignificant amount of revenue and
earnings post-synergies.
Source: Public filings
67
Case Study: G.I. Joe AAA Video Game
•
 ‡’–‡„‡” ʹͲʹͳǡ ƒ‘— ‡† ‹– ™‘—Ž† „‡ ƒ‹‰ ƒ Ǥ Ǥ ‘‡ –‹‘ †˜‡–—”‡ ƒ‡ͳ
‹ ƒ‘–Š‡” ‘‡ ‘ˆ ƒ•„”‘ǯ• ƒ––‡’–• –‘ ”‡˜‹˜‡ –Š‡ †‘”ƒ– ˆ‘ŽŽ‘™‹‰ –Š‡ǡ ‹ ‘—” ˜‹‡™ǡ ‡š–”‡‡Ž›
†‹•ƒ’’‘‹–‹‰ ”‡Ž‡ƒ•‡ ‘ˆ –Š‡ ƒ‡ ›‡• Ǥ Ǥ ‘‡ ‘˜‹‡ ”‡Ž‡ƒ•‡† ‹ ʹͲʹͳ ȋDzƒ‡ ›‡•dzȌǤ
• ‘ ƒ†† ’‡”•’‡ –‹˜‡ ‘ Œ—•– Š‘™ ’‘‘”Ž› ƒ‡ ›‡• ˆŽ‘’’‡†ǡ –Š‡ ˆ‹Ž ‰”‘••‡† δ̈́ͶͲ ‹ŽŽ‹‘ ‹ „‘š
‘ˆˆ‹ ‡ ”‡–—”• ˜•Ǥ ƒ •–ƒ–‡† „—†‰‡– ‘ˆ ̈́ͺͺ ‹ŽŽ‹‘ ƒ† ƒ ‡•–‹ƒ–‡† „”‡ƒ‡˜‡ ’‘‹– ‘ˆ ̈́ͳ͸ͲǦͳ͹ͷ
‹ŽŽ‹‘ „› ‹†—•–”› ‹•‹†‡”•Ǥʹǡ͵
•
 Ž‹‰Š– ‘ˆ –Š‡ ‘—–Ž‡•• ”‡‹˜‡•–‡– ‘’’‘”–—‹–‹‡• Šƒ• ‹ –Š‡ ƒ† Ƭ ‡ ‘•›•–‡•ǡ
we find it alarming that Hasbro’s Board is “allowing” ȋ‹ ‡–‹˜‹œ‹‰ǫ ’—•Š‹‰ǫ ˆ‘” ‹‰ǫȌ WOTC
to invest such a meaningful portion of its R&D budget into an IP that consumers clearly
have little appetite for.
• Ex-employees we have spoken with believe this is a poor allocation of WOTC resources and are
skeptical that the game will be successful.
1. https://www.pcgamer.com/wizards-of-the-coast-is-making-a-big-budget-gi-joe-game/
2. https://www.the-numbers.com/movie/Snake-Eyes-G-I-Joe-Origins-(2021)#tab=summary
3. https://variety.com/2021/film/news/snake-eyes-box-office-flop-gi-joe-toy-movies-1235026986/
68
Case Study: Transformers Card Game and Others
Ž–ƒ ‘š˜‹‡™•”‡•‘—” ‡••’‡–‘†‡˜‡Ž‘’‹‰˜‹†‡‘‰ƒ‡•‘””ƒ†‹‰ƒ”† ƒ‡•ˆ‘”‘Ǧ ƒ•„”‘ ƒ•ƒ ‘Ž‘••ƒŽ
ˆƒ‹Ž—”‡‘ˆ ƒ’‹–ƒŽƒŽŽ‘ ƒ–‹‘ƒ†™ƒ•–‡‘ˆ–ƒŽ‡–ƒ†–‹‡ ‘•‹†‡”‹‰–Š‡‹ ”‡†‹„Ž‡”‡‹˜‡•–‡–‘’’‘”–—‹–‹‡•Šƒ•
™‹–Š‹‹–• ‘”‡„”ƒ†•Ǥ
• –ǯ•‘–‘Ž› Ǥ Ǥ ‘‡Ǥ
• Hasbro had WOTC develop a Transformers card game in 2017 (that could have been in the works even
longer)ͳ which did not meet Company expectations and was shut down in 2020.ʹ
• –‹–•‹˜‡•–‘”†ƒ›‹ ‡„”—ƒ”›ʹͲʹͳǡ”Ǥ‘ •–ƒŽ‡†ƒ„‘—–̶Ž‡˜‡”ƒ‰‹‰•‘‡’‡”‡‹ƒŽ ƒ•„”‘ˆƒ˜‘”‹–‡•
™‹–Šƒ‡›‡–‘™ƒ”†•†‡˜‡Ž‘’‹‰–Š‡†‹‰‹–ƒŽŽ›ǡdz‡–‹‘‹‰ Ǥ Ǥ ‘‡ǡ”ƒ•ˆ‘”‡”•ǡ‹ ”‘ƒ—–•ƒ†—‹ŒƒȂ ƒ•‹
—‹Œƒ‘ƒ”†Ǥ
• ‡„‡Ž‹‡˜‡–Š‹•Žƒ ‘ˆˆ‘ —•‹•Œ—•–‘‡‘ˆƒ›dissynergies Šƒ•„‡‡•ƒ††Ž‡†™‹–Šƒ•ƒ•—„•‹†‹ƒ”›‘ˆ
ƒ•„”‘Ǥ
1. https://www.seibertron.com/transformers/news/wizards-of-the-coast-to-produce-transformers-card-game/40393/
ʹǤ Š––’•ǣȀȀ™™™Ǥ†‹ ‡„”‡ƒ‡”Ǥ ‘Ȁ‰ƒ‡•Ȁ–”ƒ•ˆ‘”‡”•Ǧ–”ƒ†‹‰Ǧ ƒ”†Ǧ‰ƒ‡Ȁ‡™•Ȁ–”ƒ•ˆ‘”‡”•Ǧ– ‰Ǧ‡†‡†
69
eOne’s TV and Film Business Is Low-Quality and High-Risk
eOne’s TV and film production business is speculative and hit-driven, introducing risk to Hasbro. Š‹Ž‡‡‡ ‰‡‡”ƒ–‡†
‡ƒ‹‰ˆ—Ž ƒ––Š‡–‹‡‘ˆƒ “—‹•‹–‹‘ǡ–Š‡ˆ”‡‡ ƒ•ŠˆŽ‘™‰‡‡”ƒ–‹‘‹•ƒ–‡”‹ƒŽŽ›™‘”•‡‰‹˜‡–Š‡‡‡†–‘ ‘•–ƒ–Ž›
ƒ “—‹”‡Ȁˆ‹Ž ‘–‡–ƒ†‹˜‡•–‹’”‘†— –‹‘Ǥ‡‡ǯ• ‡†‹‘ ”‡ ƒ•Š‰‡‡”ƒ–‹‘‹•‡˜‡‘”‡’”‘‘— ‡†™Š‡ ‘•‹†‡”‹‰
–Šƒ–‡‡ǯ• ‡’’ƒ‹‰ƒ† ƒ••‰‡‡”ƒ–‡†‘”‡–Šƒ̈́ͳͲͲ‹ŽŽ‹‘‹ˆ”‡‡ ƒ•ŠˆŽ‘™ƒ––Š‡–‹‡‘ˆ ƒ•„”‘ǯ•ƒ “—‹•‹–‹‘Ǥ
•
ƒ•„”‘ǯ• ƒ•Š ˆŽ‘™ ’”‘ˆ‹Ž‡ ‹• ‡ƒ‹‰ˆ—ŽŽ› ‹’ƒ –‡† „› –Š‡ ƒ “—‹•‹–‹‘ ‘ˆ
‡‡ǡ ƒ• †‡‘•–”ƒ–‡† „‡Ž‘™ „› –Š‡ ‡ƒ”Ž› ̈́͹ͲͲ ‹ŽŽ‹‘ ‹ Dz’”‘‰”ƒ
•’‡†dz ‘ ‹–• ƒ•Š ˆŽ‘™ •–ƒ–‡‡– ‹ ʹͲʹͳ ȋ˜• ̈́͵Ͷ ‹ŽŽ‹‘ ’”‡Ǧ‡‡Ȍ
•
‡•’‹–‡ ‰‡‡”ƒ–‹‰ ‡ƒ‹‰ˆ—Ž ǡ ‡‡ǯ• ƒ•Š ˆŽ‘™ ‰‡‡”ƒ–‹‘ ‹• ƒ–‡”‹ƒŽŽ›
Ž‘™‡” †—‡ –‘ –Š‡ ”‡“—‹”‡† •’‡† ‘ ‘–‡– ƒ† ’”‘†— –‹‘ǡ ™Š‹ Š ‹• ƒ ‘—–‡†
ˆ‘” ‘ –Š‡ ƒ•Š ˆŽ‘™ •–ƒ–‡‡– ȋƒ† –Š—• ‘– ”‡ˆŽ‡ –‡† ‹ Ȍ
eOne Consolidated Earnings Profile
ʹͲͳͺ
͉ʹͷͲ
͉ʹͲͲ
͉ͳͷͲ
ʹͲͳͻ
͉ͳͺʹ
͉ͳ͵͹
͉ͳͲͲ
͉͹Ͷ
͉͸Ͳ
͉ͷͲ
͉Ͳ
Ǧ͉ͷͲ
Ǧ͉ͳͲͲ
Ǧ͉ͳͷͲ
Ǧ͉ʹͲͲ
Ǧ͉ʹͷͲ
Ǧ͉͵ͲͲ
Ǧ͉ʹ͸ͻ
Ǧ͉ʹͷͶ
“—‹”‡† ‘–‡–ƒ†’”‘†— –‹‘
†Œ—•–‡† ƒ•ŠˆŽ‘™
Source: Public filings
70
US Consumer Compensation Screen Outputs
Sorted by highest to lowest compensation
Stock
LEN US Equity
DHI US Equity
HAS US Equity
WSM US Equity
BBWI US Equity
BWA US Equity
GME US Equity
WHR US Equity
PHM US Equity
MAT US Equity
ROST US Equity
VFC US Equity
ULTA US Equity
APTV US Equity
BURL US Equity
MAS US Equity
BBY US Equity
GPC US Equity
NWL US Equity
TSCO US Equity
LAD US Equity
BLDR US Equity
FBHS US Equity
AAP US Equity
LKQ US Equity
KMX US Equity
RACE US Equity
POOL US Equity
MHK US Equity
CAR US Equity
NVR US Equity
Name
LENNAR CORP-A
DR HORTON INC
HASBRO INC
WILLIAMS-SONOMA INC
BATH & BODY WORKS INC
BORGWARNER INC
GAMESTOP CORP-CLASS A
WHIRLPOOL CORP
PULTEGROUP INC
MATTEL INC
ROSS STORES INC
VF CORP
ULTA BEAUTY INC
APTIV PLC
BURLINGTON STORES INC
MASCO CORP
BEST BUY CO INC
GENUINE PARTS CO
NEWELL BRANDS INC
TRACTOR SUPPLY COMPANY
LITHIA MOTORS INC
BUILDERS FIRSTSOURCE INC
FORTUNE BRANDS HOME & SECURI
ADVANCE AUTO PARTS INC
LKQ CORP
CARMAX INC
FERRARI NV
POOL CORP
MOHAWK INDUSTRIES INC
AVIS BUDGET GROUP INC
NVR INC
Total FY21 CEO Comp
68,090,432
30,571,596
23,714,681
21,324,328
17,668,628
17,592,090
17,465,240
17,051,408
16,149,555
16,128,895
15,989,635
15,782,405
15,508,158
14,744,780
13,867,435
13,410,774
12,033,503
11,810,704
11,438,798
11,117,251
10,532,359
10,387,474
10,170,381
10,052,271
9,445,636
9,400,666
5,704,596
5,575,384
5,190,696
4,915,152
4,162,400
Sorted by highest to lowest TSR
3-Year TSR
195%
215%
37%
260%
254%
37%
1117%
141%
129%
116%
41%
18%
68%
170%
79%
145%
108%
60%
37%
197%
298%
686%
193%
56%
152%
108%
166%
291%
56%
803%
144%
Stock
GME US Equity
CAR US Equity
BLDR US Equity
LAD US Equity
POOL US Equity
WSM US Equity
BBWI US Equity
DHI US Equity
TSCO US Equity
LEN US Equity
FBHS US Equity
APTV US Equity
RACE US Equity
LKQ US Equity
MAS US Equity
NVR US Equity
WHR US Equity
PHM US Equity
MAT US Equity
BBY US Equity
KMX US Equity
BURL US Equity
ULTA US Equity
GPC US Equity
AAP US Equity
MHK US Equity
ROST US Equity
HAS US Equity
BWA US Equity
NWL US Equity
VFC US Equity
Name
GAMESTOP CORP-CLASS A
AVIS BUDGET GROUP INC
BUILDERS FIRSTSOURCE INC
LITHIA MOTORS INC
POOL CORP
WILLIAMS-SONOMA INC
BATH & BODY WORKS INC
DR HORTON INC
TRACTOR SUPPLY COMPANY
LENNAR CORP-A
FORTUNE BRANDS HOME & SECURI
APTIV PLC
FERRARI NV
LKQ CORP
MASCO CORP
NVR INC
WHIRLPOOL CORP
PULTEGROUP INC
MATTEL INC
BEST BUY CO INC
CARMAX INC
BURLINGTON STORES INC
ULTA BEAUTY INC
GENUINE PARTS CO
ADVANCE AUTO PARTS INC
MOHAWK INDUSTRIES INC
ROSS STORES INC
HASBRO INC
BORGWARNER INC
NEWELL BRANDS INC
VF CORP
Total FY21 CEO Comp
17,465,240
4,915,152
10,387,474
10,532,359
5,575,384
21,324,328
17,668,628
30,571,596
11,117,251
68,090,432
10,170,381
14,744,780
5,704,596
9,445,636
13,410,774
4,162,400
17,051,408
16,149,555
16,128,895
12,033,503
9,400,666
13,867,435
15,508,158
11,810,704
10,052,271
5,190,696
15,989,635
23,714,681
17,592,090
11,438,798
15,782,405
Source: Bloomberg. Note that Hasbro’s CEO compensation is adjusted to exclude compensation paid to interim CEO.
71
3-Year TSR
1117%
803%
686%
298%
291%
260%
254%
215%
197%
195%
193%
170%
166%
152%
145%
144%
141%
129%
116%
108%
108%
79%
68%
60%
56%
56%
41%
37%
37%
37%
18%
Hasbro Segment Results Over Last Decade
‡Ž‘™ǡ™‡•Š‘™‘—”‡•–‹ƒ–‡ˆ‘” ƒ•„”‘ǯ•”‡˜‡—‡ƒ† „›•‡‰‡–‘˜‡”–Š‡Žƒ•–†‡ ƒ†‡Ǥ
‘–Š‡‡š–‡–Ž–ƒ ‘šǯ•‡•–‹ƒ–‡•ƒ”‡‹ƒ —”ƒ–‡ǡ–Š‡ˆƒ—Ž–Ž‹‡•™‹–Š–Š‡‘ƒ”†ˆ‘”Žƒ ‘ˆ ”‹–‹ ƒŽ•‡‰‡–†‹• Ž‘•—”‡•Ǥ
USD M
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
Total Hasbro Revenue
$4,286
$4,089
$4,082
$4,277
$4,448
$5,020
$5,210
$4,580
$4,720
$5,465
$6,420
$275
$374
$466
$482
$499
$526
$525
$585
$761
$907
$1,287
$1,377
$1,261
$981
$1,243
$3,995
$3,959
$3,578
$3,891
WOTC Revenue
eOne Revenue
HAS Consumer Revenue pre eOne
$4,011
$3,715
$3,616
$3,795
$3,949
$4,494
$4,684
Revenue vs 2011
-3.0%
Total Hasbro adj EBITDA
$736
$695
$638
$791
$856
$944
$1,036
$796
$911
$1,065
$1,310
WOTC adj EBITDA
$294
$278
$255
$316
$343
$378
$415
$319
$313
$444
$606
WOTC EBITDA Margin1
40%
40%
40%
40%
40%
40%
40%
40%
41%
49%
47%
$218
$263
$194
$263
eOne adj EBITDA
Consumer adj EBITDA pre eOne
Implied Consumer EBITDA Margins
$442
$417
$383
$475
$514
$567
$622
$478
$599
$427
$441
11.0%
11.2%
10.6%
12.5%
13.0%
12.6%
13.3%
12.0%
15.1%
11.9%
11.3%
Consumer EBITDA vs 2011
-0.1%
‡‰‡†ǣ‡ŽŽ‘™α‡•–‹ƒ–‡ǡ”ƒ‰‡α†”‹˜‡”ǡ‰”ƒ›α”‡ˆ‡”‡ ‡’‘‹–ˆ‘”’”‘ˆ‘”ƒ”‡•—Ž–•ȋ‘–†”‹˜‹‰Ȍ
‘–‡–Šƒ––Š‹•ƒƒŽ›•‹•†‘‡•‘–ƒ†Œ—•–ˆ‘”–Š‡ε̈́ͷͲͲ‘™‡”ƒ‰‡”•ƒ “—‹•‹–‹‘‹ʹͲͳͺǡ‘”–Š‡ε̈́͵ͲͲ‘ˆ‘•—‡” ‘–”ƒ –• Ž‘•–„› ƒ•„”‘Š‹––Š‡Ƭ‹ ʹ͵Ǥ
ͳǤŠ”‹•‘ •ƒ– ‡ˆˆ‡”‹‡•‘˜‡„‡”ʹͲʹͳ ˜‡•–‘”ƒŽŽǣDz ˆ›‘—Ž‘‘ƒ–‘—”ͳͲǦ’Ž—•›‡ƒ”–”ƒ ”‡ ‘”†ǡ™‡ȏȐŠƒ˜‡ƒ ‘ˆ ‹‡š ‡••‘ˆͳ͵Ψ‹–‡”•‘ˆ‘˜‡”ƒŽŽ”‡˜‡—‡‰”‘™–Šƒ†ƒ•‹‹Žƒ” ‹–‡”•‘ˆ
‘˜‡”ƒŽŽ‘’‡”ƒ–‹‰’”‘ˆ‹–‰”‘™–ŠǤ—”‘’‡”ƒ–‹‰’”‘ˆ‹–•Š‹•–‘”‹ ƒŽŽ›Šƒ˜‡„‡‡‹–Š‡ͶͲΨ”ƒ‰‡Ǥdz
‘—” ‡ǣˆ‹Ž‹‰•
72
Ineffective “Brand Blueprint” Strategy
Since embarking on its “Brand Blueprint” strategy in 2010, Hasbro’s stock price has underperformed the S&P 500 by
>170%.
Hasbro Annual Mentions of the "Brand Blueprint" Strategy Across SEC Filings & Transcripts
Mentions of “Brand Blueprint”
300
250
200
150
100
50
0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
‘—” ‡: Ž‘‘„‡”‰ȋƒ••—‡•†‹˜‹†‡†•ƒ”‡”‡‹˜‡•–‡†ȌǡŽ’Šƒ‡•‡Ǥ••—‡•ƒ•–ƒ”–‹‰†ƒ–‡‘ˆͳͳȀͻȀʹͲͳͲˆ‘ŽŽ‘™‹‰ ƒ•„”‘ǯ•ƒ‘— ‡‡–‘ˆ‹–•Dz”ƒ†Ž—‡’”‹–dz•–”ƒ–‡‰›–‘‹˜‡•–‘”•ƒ–‹–•‹˜‡•–‘”
†ƒ›Ǥ‘–”ƒ”›–‘ ƒ•„”‘ǯ•ˆ‹‰Š–Ž‡––‡”ƒ†’”‘š›ƒ–‡”‹ƒŽ•–Šƒ–•Š‘™ƒ•–ƒ”–‹‰†ƒ–‡ˆ‘”–Š‡Dz”ƒ†Ž—‡’”‹–dz•–”ƒ–‡‰›‘ˆͷȀʹʹȀʹͲͲͺǡ–Š‡”‡‹•‡–‹‘‘ˆ–Š‡Dz”ƒ†Ž—‡’”‹–dz•–”ƒ–‡‰›„‡ˆ‘”‡ ƒ•„”‘ǯ•
ʹͲͳͲ‹˜‡•–‘”†ƒ›ǤŠ‡•–”ƒ–‡‰›ˆ‹”•–ƒ’’‡ƒ”‡†‹ ƒ•„”‘ǯ•ʹͲͳͲͳͲǦˆ‹Ž‡†‘ʹȀʹ͵ȀͳͳǤ––ƒ Š‡†Š‡”‡ ‹•–Š‡ʹͲͳͲ’”‡••”‡Ž‡ƒ•‡†‡–ƒ‹Ž‹‰–Š‡ˆ‹”•–‡–‹‘‘ˆ–Š‡”ƒ†Ž—‡’”‹–•–”ƒ–‡‰›Ǥ
73
Alta Fox’s Email to Mr. Cocks Sending Congratulations and Requesting a
Meeting
Ž–ƒ ‘š‡ƒ‹Ž‡†”Ǥ‘ •–Š‡†ƒ›Š‡„‡ ƒ‡–‘ ‘‰”ƒ–—Žƒ–‡Š‹ǡ‡’Šƒ•‹œ‡‘—”—–—ƒŽƒŽ‹‰‡–ƒ†”‡“—‡•–ƒ’”‹ ‹’ƒŽǦ
–‘Ǧ’”‹ ‹’ƒŽ ‘˜‡”•ƒ–‹‘Ǥˆ‘”–—ƒ–‡Ž›ǡ ƒ•„”‘ǯ•‘ƒ”††‹†‘–ƒ‡”Ǥ‘ •ƒ˜ƒ‹Žƒ„Ž‡—–‹Ž‘˜‡”ƒ‘–ŠŽƒ–‡”ƒ†ƒˆ–‡”‹–Šƒ†
ƒŽ”‡ƒ†› ‘‹––‡†–‘ƒ†‡ˆ‡•‹˜‡‡š’ƒ•‹‘ˆ”‘ͳͳ–‘ͳ͵‡„‡”•ǡ™Š‹ Š†‹†‘–‹ Ž—†‡ƒ›Ž–ƒ ‘š‘‹‡‡•Ǥ
From: Connor Haley Connor@altafoxcapital.com
Sent: Friday, February 25, 2022 7:11 AM
To: Cocks, Chris Chris.Cocks@Hasbro.com
Subject: Congratulations
Chris,
Congratulations on officially taking over as Hasbro’s CEO today.
As one of the Company’s largest investors, we recognize that your success is our success. As we have stated publicly, we are impressed by your accomplishments at WOTC. With
your demonstrated ability to create value for Hasbro at WOTC, we hope that you similarly will find ways to generate value for Hasbro’s shareholders in your new role, and we want to
engage in a dialogue with you about how to best accomplish that.
You should know that we felt compelled to publicize our nominations and proposals for value creation after facing consistent dismissiveness during our private engagement with
Hasbro’s leadership over the past several months. Hopefully, that attitude will change under your leadership. Alta Fox is a top shareholder with locked-up capital and committed
institutional backing. We plan to be around for the long-term and will continue our advocacy until changes are made that unlock value for shareholders. Since releasing our views and
our slate of nominees last week, we are receiving a significant amount of unsolicited support from other large investors. Shareholders are frustrated with the lack of transparency,
questionable capital allocation decisions, and the significant conglomerate discount—negatively impacting Hasbro’s valuation.
We would welcome a constructive principal-to-principal discussion about the strategic direction of Hasbro. If we can cut out the high-priced advisors with divergent incentives serving
as intermediaries, I am confident that you would find me to be direct, honest, and thoughtful. Ultimately, we believe that Alta Fox and our respective nominees could be your greatest
supporters in creating value for Hasbro’s shareholders.
Sincerely,
Connor
74
Recent Communications are Window Dressing from Disingenuous Board
ƒ•„”‘Šƒ•”‡ ‡–Ž›–‘—–‡†‹–•‡’Šƒ•‹•‘Dz ƒ’‹–ƒŽƒŽŽ‘ ƒ–‹‘dzƒ†Dz•Šƒ”‡Š‘Ž†‡””‡–—”Ǥdz ‘™‡˜‡”ǡ–Š‡–™‘ Šƒ”–•„‡Ž‘™
†‡‘•–”ƒ–‡–Šƒ– ƒ•„”‘ǯ•”‡ ‡– ‘—‹ ƒ–‹‘•ƒ”‡‡”‡Ž›™‹†‘™†”‡••‹‰ˆ”‘ƒ‡–”‡ Š‡†‘ƒ”†Ǥ –™ƒ•‘–—–‹ŽŽ–ƒ
‘š„‡‰ƒ’”‹˜ƒ–‡Ž› ƒŽŽ‹‰ƒ––‡–‹‘–‘–Š‡•‡ƒ”‡ƒ•†‹”‡ –Ž›–‘ ƒ•„”‘‹Ͷ‘ˆʹͲʹͳ–Šƒ– ƒ•„”‘ǯ• ‘—‹ ƒ–‹‘ Šƒ‰‡†Ǥ
Hasbro Annual Mentions of "Capital Allocation"
Across SEC Filings & Transcripts
45
Hasbro Annual Mentions of "Shareholder Return"
Across SEC Filings & Transcripts
14
40
12
35
30
10
25
8
20
6
15
4
10
2
5
0
0
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
‘—” ‡ǣŽ‘‘„‡”‰ǡˆ‹Ž‹‰•Ǥ
š Ž—†‡•ƒƒŽ›•–‡–‹‘•Ǥ
75
Urgent Change is Desperately Needed As Hasbro’s Market Share Losses
Are Rapidly Accelerating Under an Entrenched and Ineffective Board
•
•
This year alone, under the unqualified Interim CEO Stoddart, Hasbro has lost key licensing contracts resulting in well over $300M of revenue (nearly 10% of
Consumer revenue).
•
 ƒ—ƒ”›ʹ͸ǡʹͲʹʹǡ ƒ•„”‘Ž‘•––Š‡‹•‡›”‹ ‡••Ȁ ”‘œ‡Ž‹ ‡•‡ǡƒŽŽ‘™‹‰–Š‹•‡›Ž‹ ‡•‡–‘•Ž‹’–Š”‘—‰Š‹–•‰”ƒ•’ƒ†ˆƒŽŽ„ƒ ‹–‘–Š‡Šƒ†•‘ˆƒ––‡ŽǤͳǡʹ
•
ƒ” ŠͶǡʹͲʹʹǡ ƒ•„”‘Ž‘•––Š‡‡•ƒ‡‘”•Š‘’Ž‹ ‡•‡–‘ —•–Žƒ›Ǥ͵
•
ƒ” ŠʹͻǡʹͲʹʹǡ ƒ•„”‘Ž‘•––Š‡”‘ŽŽ•–‘›Ž‹ ‡•‡–‘ƒ––‡ŽǤͶ
These losses are an acceleration of a long-term trend that has been building for the last decade.
•
•
Ž‹‡ƒ––‡Žǡ–Š‡ —””‡–‡–”‡ Š‡†‘ƒ”†Šƒ•ˆƒ‹Ž‡†–‘’‹˜‘–‹–••–”ƒ–‡‰›ƒ†Šƒ•ƒ†‡•‡˜‡”ƒŽ†‡•’‡”ƒ–‡ƒ†˜ƒŽ—‡Ǧ†‡•–”— –‹˜‡ƒ “—‹•‹–‹‘•–‘‘„• —”‡”‡•—Ž–•
ƒ††‹•–”ƒ –‹˜‡•–‘”•ˆ”‘–Š‡’‘‘”—†‡”Ž›‹‰’‡”ˆ‘”ƒ ‡ǤŠ‹•‹ Ž—†‡• ƒ•„”‘ǯ•Ƭ‡›‘†ƒ “—‹•‹–‹‘‹’”‹ŽʹͲʹʹˆ‘”̈́ͳͶ͸ǡˆ‘”™Š‹ Š‹˜‡•–‘”•™‡”‡
‘–‰‹˜‡ƒ›”‡ˆ‡”‡ ‡•–‘–Š‡ƒ••‡–ǯ•”‡˜‡—‡‘”’”‘ˆ‹–ƒ„‹Ž‹–›Ǥ
If left unchecked, we believe Hasbro’s Board will continue to recklessly invest shareholder capital and trade at a substantial discount to fair value.
Hasbro vs Mattel Recent Results vs 2019
Hasbro Consumer Revenue
Sales growth vs comparable 2019 period
Mattel Revenue
Sales growth vs comparable 2019 period
Q1-2021 Q2-2021 Q3-2021 Q4-2021 Q1-2022
654
689
1,283
1,356
673
6%
-5%
-7%
6%
9%
874
1,026
1,762
1,795
1,041
27%
19%
19%
22%
51%
ƒ•„”‘ǯ•”‡ ‡–”‡•—Ž–•ƒ”‡„‘Ž•–‡”‡†„›•‘‡‘ˆ–Š‡̈́ͶǤ͸‡‡ƒ “—‹•‹–‹‘•›‡”‰‹‡•Ǥƒ––‡Žǯ•‰”‘™–Š
Šƒ•„‡‡’—”‡Ž›‘”‰ƒ‹ Ǥƒ––‡Žǯ•”‡ ‡–’ƒ”–‡”„”ƒ†™‹•ˆ”‘ ƒ•„”‘ȋ‹•‡›”‹ ‡••Ȁ ”‘œ‡Ƭ
”‘ŽŽ•Ȍ™‹ŽŽ‘–‹’ƒ –”‡•—Ž–•—–‹ŽʹͲʹ͵Ǥ
‘—” ‡ǣ’—„Ž‹ ˆ‹Ž‹‰•Ǥ
1.
2.
3.
4.
https://www.wsj.com/articles/mattel-wins-disney-toy-deal-joining-elsa-of-frozen-with-barbie11643198404
https://www.theglobeandmail.com/globe-investor/investment-ideas/highs-and-lows-of-toyindustry-make-hasbro-mattel-risky-buys/article21977477/
https://kidscreen.com/2022/03/04/just-play-takes-over-sesame-workshop-toy-licensing/
https://kidscreen.com/2022/03/29/mattel-takes-over-trolls-toy-license-from-hasbro/
76