Hedge fund threatens proxy fight at WEX, alleging 'pattern of underperformance'

Photo / Renee Cordes Impactive Capital LP, a New York-based hedge fund and WEX Inc. shareholder, aims to replace three of the company's directors with four nominees of its own in 2026 unless WEX changes course.

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By Renee Cordes

Impactive Capital LP, a New York-based hedge fund and minority shareholder in WEX Inc. (NYSE: WEX), is threatening a proxy fight at the Portland-based financial technology services provider.

Impactive owns around 7% of shares in WEX, which had a market capitalization of around $4.7 billion as of Wednesday’s close on Wall Street. The stock is trading more than 25% lower than a year ago, closing at $137.32 per share on Wednesday.

Arguing that WEX is undervalued, Impactive aims to replace three WEX board members — including Melissa Smith, the company’s CEO, president and board chair — and nominate four individuals at next year’s annual meeting. The fund said it will proceed with the move unless WEX reverses its "pattern of underperformance and unconstructive engagement."

WEX, a provider of fleet management, payments and benefits administration services to employers around the world, posted better-than-expected first-quarter results on April 30. The company also tweaked its full-year financial guidance in anticipation of “small but manageable” headwinds.

Earlier this month, Smith and two other directors saw their support decline at the company’s 2025 annual meeting. Smith, for example, received only 64.3% support compared to 97.7% last year, according to Impactive Capital.

The other directors that garnered lower support from shareholders this year were Jack Van Woerkom, who has served on the board for two decades; and James Neary, who has been on the board for nearly a decade and initially appointed to represent Warburg Pincus, a private equity firm that has not held shares in WEX for three years.

“As one of WEX’s largest and most committed long-term investors, we want nothing more than to see the company succeed,” said Lauren Taylor Wolfe, co-founder and managing partner of Impactive.

“Unfortunately, the gap between WEX’s intrinsic value and its stock price has continued to widen and the company has shown no indication that it possesses a viable strategy for reversing this trend,” she added. “In spite of our attempts over the past four years to work constructively to address the company’s valuation gap, the board has repeatedly dismissed our efforts to strengthen shareholder alignment by adding an Impactive representative as a director.”

Track record

Impactive said that while its preference is to “engage privately and constructively,” it will nominate four directors to WEX's board next year unless the Portland-based firm changes course.

Impactive has owned shares in WEX for four years. In April 2024, the hedge fund became a shareholder in Marriott Vacations Worldwide Corp. (NYSE: VAC), which on Tuesday expanded its board to include Impactive co-founder Christian Alejandro Asmar as a director.

Impactive has only had to nominate directors in one other instance. That was at Envestnet, a Pennsylvania-based fintech company where a proxy fight was averted following a 2023 settlement that saw three new directors join the board, including Taylor Wolfe. (The formerly publicly traded company was taken private in 2024 in a deal valued at $4.5 billion.)

WEX response

A spokesperson for WEX responded to Impactive's threat in a statement emailed to Mainebiz.

"Members of WEX’s management team have spoken with Impactive’s principals dozens of times over the last three years,” the spokesperson said. “It was not until late last year that Impactive requested board representation. We have a history of constructive engagement and intend to continue those conversations."