SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Bulldog Investors, LLC
Attn: Phillip Goldstein
250 Pehle Avenue, Suite 708
Saddle Brook, NJ 07663
Phone: 201 881-7100
Fax: 201 556-0097
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Preliminary Proxy Statement
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Rule 14a-6(e)(2))
Definitive Proxy Statement [ ]
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Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-
12
Hill International Inc.
(Name of Registrant as Specified in Its Charter)
Bulldog Investors, LLC
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Registrant)
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Bulldog Investors, LLC, 250 Pehle Avenue, Suite 708, Saddle Brook, NJ 07663
(201) 881-7111 // pgoldstein@bulldoginvestors.com
July 11, 2016
Dear Fellow Stockholder of Hill International:
Last year, David Richter, Hill's CEO, promised to "significantly increase
stockholder value." In a press release issued on June 9, 2015, he stated:
"We are confident that Hill's current strategic plan combined with our strong
growth outlook and aggressive cost optimization program will deliver both
near- and long-term value to our stockholders." Hill's shares closed at $5.31
on that day. Subsequently, Hill's stock price fell more than almost 50% to a
low of $2.83 and currently is far below $5.31.
Mr. Richter's recent annual letter to stockholders is chock full of
impressive photographs of Hill's construction projects. Alongside a smiling
photo of himself is his assessment that 2015 "was a very positive year" and
he is "proud of the company's significant achievements." While patting
himself on the back for "winning awards for project excellence," he explains
Hill's anemic earnings for 2015 by pointing to what he says are six
extraordinary expenses totaling $7.7 million. Hill also incurred $10.8 million
of extraordinary expenses in 2014. Unfortunately, as stockholders, we have
come to expect "extraordinary" expenses to recur with a troubling degree of
regularity. Not until the end of his letter does Mr. Richter admit: "[W]e have
not been as successful in driving better performance in our stock price." We
think pretty pictures, awards and endless excuses are little comfort to
stockholders that relied on him to deliver on his promises.
Many investors believe that Hill's shares trade for much less than their
intrinsic value. We think the main reason for this "Richter discount" is, as
ISS, the leading proxy advisory service, put it last year, "the board's failure
to address Hill's pay-for-performance disconnect." Since that was written, the
board has done nothing to rein in the excessive compensation that David Richter
and his father, Irvin, collect from Hill for lackluster performance.
MISALIGNMENT OF INTERESTS
In its proxy statement, the board says: "We are committed to executive
compensation practices that drive performance and that align the interests of
our leadership team with the interests of our stockholders." That sounds good
but let's look at the record.
In 2015, Hill earned $6.9 million while David Richter received compensation
totaling $3.6 million including the use of two company vehicles. His base salary
increased by 50% from 2014 from $1 million to $1.5 million per annum. Not to be
outdone by his son, Irvin Richter, the chairman of the board, collects an annual
base salary of $1.4 million pursuant to a so-called "employment agreement" to
serve as chairman "with such duties as may be assigned to him from time to time
by the Board" - whatever that means. On top of that, he also gets two vehicles
"for his use," company paid life insurance, and six weeks of vacation (from
what?) even though his contract states that he "shall not be required to devote
any specific or minimum hours to the fulfillment of his duties." With all that,
Irvin Richter apparently needs to regularly sell his own shares of Hill to make
ends meet.
What sort of directors would approve such a contract? Apparently, the same
ones that agreed to pay Irvin Richter $1.2 million for his unused vacation when
he retired as CEO at the end of 2014. Have you ever heard of anyone that
received such a staggering amount of money for unused vacation? What were the
directors thinking?
What have stockholders received for this largesse? Net losses over the last
five years total more than $2 per share and total equity has declined from $172
million to $118 million despite an increase in the number of outstanding shares
from 38 million to 51 million.
WHAT NEEDS TO BE DONE NOW
Unlike Hyman Roth in The Godfather II who always made money for his
partners, the Richters only seem to make money for themselves. It is apparent
that the current board is not up to the task of correcting the disconnect
between the Richters' lavish compensation and their failure to generate
stockholder value. Fortunately, we have an opportunity to effect change by
electing three directors whose only interest is in maximizing stockholder
value.
It is critical that you vote the enclosed GREEN proxy. If you have already
voted management's proxy (even if you voted against the board's nominees), you
must vote our GREEN proxy in order to elect our affiliate's nominees. You may
vote your proxy online at WWW.PROXYVOTE.COM or by telephone at 1-800-454-8683
if your shares are held in street name. Alternatively, you can mail the GREEN
proxy card in the enclosed envelope but please do it today. If you have any
questions about how to vote your proxy, please call InvestorCom at
1-877-972-0090.
Very truly yours,
/s/ Phillip Goldstein
Phillip Goldstein
Member