The hedge fund manager who wants Healthways CEO Ben Leedle removed on Tuesday told the company's board he plans to nominate a competing slate of director candidates for election this spring.
In a letter, Conan Laughlin of Boston-based North Tide Capital, which owns 11 percent of Franklin-based Healthways, sharply criticized the board's "abject failure to hold Mr. Leedle accountable for his continued operational shortcomings" and its "apparent disinterest in examining and addressing the substantial credibility issue that the current management team has within the investment community."
Laughlin last month  called for the ouster of Leedle as well as the overhaul of its strategic priorities, but the Healthways board came to the defense of its CEO. "Shocked by the Board's blatant laissez-faire attitude toward the need for change," Laughlin says he plans to pursue all options available, the clearest of which is putting forward director candidates this spring.
"Exactly what has Mr. Leedle done over the last ten years to warrant your unwavering support?" Laughlin wrote in his letter, which is available here . "The Board’s tolerance for a CEO who has performed so poorly for so long causes us to fundamentally question whether Healthways is being run for the benefit of its shareholders."
Healthways' board is classified into three groups but shareholders voted last May to eliminate the staggered structure by the spring of 2016. Laughlin says he plans to push for "substantial" board representation but did not offer details. Among the four directors whose terms are expiring this year are co-founder and former CEO Tom Cigarran and retired banker John Ballantine, who has been chairman since 2011.
Healthways officials did not respond to a request for comment Tuesday.
Shares of Healthways (Ticker: HWAY ) rose more than 6 percent Tuesday to $16.66 and have now recovered all of the ground lost after Leedle and his team reported a disappointing third quarter.