+Jun 5, 20260A review of management team and board of directorsIntroductionThe activist hedge fund TOMS Capital has singled out management and the board as the primary reasons for Voya's valuation discount—a forward P/E of less than 8x versus peers trading at 10–12x—calling them "strategically indecisive" with "deteriorating credibility"-. Yet the board has remained supportive, continuing to approve Lavallee's strategy and capital returns.Below is a detailed assessment of who is steering the ship, what track record they bring, and whether shareholders should view them as fiduciaries or liabilities.Key Management Members: Tenures and BiographiesHeather H. Lavallee — President, CEO, and DirectorAge: 56-11Tenure as CEO: January 1, 2023 – present (approximately 3.5 years)-Board member since: July 2022-Total Voya tenure: Over 10 years across multiple roles-12Prior Voya roles:President and CEO-elect (oversaw Workplace Solutions, Investment Management, technology, data, strategy, and risk)CEO of Wealth Solutions business (led 401(k), 403(b), and 457 plans)President of Tax-Exempt Markets businessPresident of Employee Benefits (now Health Solutions)-12Relevant prior experience: Mutual of Omaha (Regional VP, Group Insurance Division) and Sun Life New York Insurance and Annuity Company (marketed group life, disability, and medical stop-loss insurance)-12Compensation (2025): Over $16.2 million (total package, including stock and options)-. Her total annual compensation is approximately $9.72 million, consisting of about 9.8% salary and 90.2% performance-based bonuses-.Michael R. Katz — Chief Financial Officer and Executive Vice PresidentAge: 49-1-4CFO tenure: January 2025 – present (approximately 1.5 years)-1Prior Voya roles: Chief Strategy, Planning, and Investor Relations Officer; Senior VP and Head of Investor Relations and Enterprise Financial Planning-1Katz stepped into the CFO role relatively recently, having previously been Voya's head of investor relations. His appointment came amid mounting investor scrutiny over the BenefitFocus acquisition and stop-loss losses. The 2025 proxy statement reported Katz's compensation at $4.11 million total-.Santhosh Keshavan — Chief Information and Operations OfficerTenure at Voya: EVP since 2021; CIO since 2017-1Total Voya tenure: Approximately 8 yearsKeshavan has over 25 years of public and private sector experience as a transformation leader, previously serving as EVP and Chief Information Officer for Regions Bank. He has overseen Voya's digital transformation, including AI adoption and automation, which has been a core pillar of management's operational efficiency narrative-64-1.Other Key ManagementExecutiveRoleVoya TenurePrior BackgroundTrevor OgleChief Legal Officer and EVPMay 2025 – presentPreviously Deputy General Counsel; Head of Corporate Development; Chief Strategy and M&A Officer-1Jacques LongerstaeyChief Risk Officer–Former CRO at Nuveen; Head of Financial Risk for TIAA; senior roles at Wells Fargo, State Street Global Advisors, and Putnam Investments-1Matt TomsCEO of Voya Investment Management–Previously Global CIO and CIO of fixed income at Voya IM; 30+ years asset management experience-The Board of Directors: Tenures and CompositionThe board consists of 12 directors, 11 of whom are independent, with an average tenure of 6.5 years and an average age of 64-28.Ruth Ann M. Gillis — Non-Executive ChairmanBoard tenure: Since 2015 (approximately 11 years)-Chair since: May 2024-Background: Over 37 years in regulated industries (banking, insurance); former CFO of banking entities; extensive public board directorships including KeyCorp and Snap-on Incorporated-Heather H. Lavallee — Director (CEO)Board tenure: Since July 2022 (approximately 3.5 years)-Role: President, CEO, and DirectorJoseph V. Tripodi — Independent DirectorBoard tenure: Since 2015 (approximately 11 years)-Background: Former Chief Marketing Officer of Subway; EVP and Chief Marketing and Commercial Officer of The Coca-Cola Company-William J. Mullaney — Independent DirectorBoard tenure: Since July 2024 (approximately 2 years)-Background: Nearly 40 years in retirement, life, annuities, and insurance industries; former President of MetLife's US Business; former Managing Director at Deloitte-Aylwin B. Lewis — Independent DirectorBoard tenure: Since October 2020 (approximately 5 years)-Background: Former Chairman, CEO, and President of Potbelly Corporation (2008–2017); former Vice Chairman and CFO of Voya Financial, Inc.-A note on Lewis's role: As a former Voya executive, Lewis brings deep institutional knowledge, but his prior service as Vice Chairman and CFO raises governance questions about whether the board has sufficient independent oversight of management.Other Board MembersDirectorTenure StartedBackgroundLynne Biggar2022–Stephen Bowman2023–Hikmet Ersek2023–Jane Chwick2017–Kathleen DeRose2019–Yvette Butler2021–Rob Leary2024–The board committees include Audit, Compensation, Nominating/Governance, Risk, Technology, and Executive, all with independent members-28.Quantified Track Record: Achievements and Failures📈 Achievements (Quantified)MetricDataPeriod / SourceRetirement segment pre-tax earnings$959 million2025 proxy-28Record net inflows$28.2 billion2025-28Retirement client assets$797 billion2025-28Investment Management pre-tax earnings$226 million with record net revenues >$1 billion2025-28Investment Management net inflows$14.6 billion (4.8% organic growth)2025-28Employee Benefits pre-tax earnings$152 million (up from $40 million in 2024)2025-28Pre-tax adjusted operating earningsOver $1 billion2025-28Excess capital generated$775 million2025-28Total assets$1.1 trillion2025-515-year total shareholder return+56%As of October 2025-643-year total shareholder return+22%As of October 2025-64📉 Failures and Setbacks (Quantified)FailureQuantified ImpactAttributionBenefitFocus acquisition$595 million purchase at a 49% premium in January 2023-; attributed by TOMS Capital as primary reason for Voya's valuation discountManagement and board jointlyStop-loss segment$37 million reserve added in Q4 2025; unit reported $10 million operating loss in Q4 2025-51-52; Health Solutions margin pressure has persisted for two consecutive yearsManagement (underwriting and risk selection)ROE erosionROE declined from 13.96% in 2021 to 7.98%–9.37% in 2025-43-44Largely attributable to BenefitFocus drag on earningsStock stagnationShare price largely unchanged over past two years despite surpassing $1 trillion in assets and $1 billion in pre-tax earnings-51Market penalizing management credibility and stop-loss uncertaintyValuation discountForward P/E <8x versus peers at 10–12x; TOMS Capital directly attributes this to management's "failed decision to acquire BenefitFocus"Management and boardActivist shareholder campaignTOMS Capital has built a stake and is publicly pressuring for strategic review, including potential sale or breakup, citing "strategic indecisiveness" and "deteriorating credibility"-Management and boardCapital Allocation Prudence: Arguments For and Against🔹 Arguments For (Capital Allocation Has Been Solid)1. Substantial and sustained shareholder returnsReturned $800 million to shareholders through share repurchases and dividends in 2024-34Returned **$375 million** in 2025 ($200 million in buybacks + $174 million in dividends)-28Since inception, Voya has returned approximately $6 billion to shareholders through share repurchases and dividends-Announced $100 million buyback in Q4 2025 and $150 million in Q1 2026-2. Dividend growth that rewards long-term holdersQuarterly common stock dividend increased to $0.47 per share from historical lows-32-Common stock dividends paid grew 15% year-over-year to $0.437 billion in 2025-Total common and preferred dividends grew 23.7% year-over-year in 2025-Dividends per share grew from $0.15 in 2020 to $1.88 annualized by 2025-3. Strategic M&A with disclosed capital disciplineThe OneAmerica retirement plan business acquisition (closed January 2025) exceeded earnings targets, and Voya's CFO indicated the company is maintaining a "high bar for opportunistic M&A"-28Voya invested capital in Sconset Re to further its third-party insurance asset management position-344. Conservative leverage managementDebt/Equity ratio declined from 0.66 in 2023 to 0.50 in 2025-44Interest coverage improved from 3.28 in 2023 to 4.39 in 2025-44Excess capital of approximately **$0.4 billion** as of year-end 2025, with a $562 million remaining repurchase authorization-ROE, despite recent erosion, has recovered from negative levels in 2018–2020 to double-digit territory for most of 2021–2024-435. Strong segment performance outside Health SolutionsRetirement and Investment Management businesses have delivered consistent growth, with total platform assets surpassing $1 trillion and strong net inflows-51🔹 Arguments Against (Capital Allocation Has Been Questionable)1. The BenefitFocus acquisition remains the central failureMetricValuePurchase price$595 million total consideration-Premium paid49% to BenefitFocus's closing price prior to deal announcementTimingJanuary 2023 – near market highsGoodwind carried$804 million in total goodwill as of Q4 2025TOMS Capital directly ties Voya's valuation discount to this single transaction, stating in its shareholder letter that "management's failed decision to acquire benefit administration company BenefitFocus at a 49% premium in 2022" is the primary reason the stock trades at less than 8x forward earnings despite strong performance in core businesses-.2. Stop-loss segment mismanagement offset core business strengthDespite $959 million in retirement segment earnings and $226 million in Investment Management earnings, the Health Solutions segment has been a persistent drag-28$37 million reserve added in Q4 2025 due to "unexpected cancer claims among younger demographics" and rising pharmaceutical costsThe segment reported an operating loss of approximately $10 million in Q4 2025-513. ROE has been consistently declining since 20212021: 24.19% (peak)2022: 7.76%2023: 10.94%2024: 10.63%2025: 9.37%-43The 2025 ROE of 9.37% represents a 61% reduction from 2021's peak of 24.19% — a sharp decline that shareholders have not been compensated for through share price appreciation or dividend growth.4. Significant executive compensation despite subpar performanceCEO Heather Lavallee earned over $16.2 million in 2025-CFO Michael Katz earned over $7.5 million-Critics argue there is a "disconnect between compensation and performance," with shareholder compensation being questioned-5. Heavy reliance on buybacks without commensurate stock appreciationDespite returning $800 million to shareholders in 2024 and $375 million in 2025, the share price has remained "largely unchanged over the past two years"-51The benefits of share buybacks have been largely offset by multiple compression due to investor skepticism about management credibility6. Board tenure is long but oversight appears insufficientAverage director tenure is 6.5 years, suggesting limited fresh perspectives-28The board approved both the 49%-premium BenefitFocus acquisition and the stop-loss business strategy that required a $37 million Q4 2025 reserveTOMS Capital has specifically criticized "the board's continued inaction" and stated that "the board's continued inaction has become part of the problem"-Shareholder-Friendly Actions: Where Management and Board StandActionEvidence of Shareholder-FriendlinessEvidence of Shareholder-UnfriendlinessShare buybacks$6 billion returned since inception; $800 million (2024) + $375 million (2025); $150 million planned for Q1 2026Buybacks have failed to lift stock price due to multiple compressionDividendsGrew from $0.15/share in 2020 to $1.88/share by 2025 (annualized) — a 1,153% increase; 15% YoY growth in 2025Relatively low payout ratio (approximately 19%)-44M&A strategyOneAmerica acquisition exceeding earnings targets; disciplined approach post-OneAmericaBenefitFocus overpay at 49% premium remains an anchor on valuationInsider ownershipLavallee holds 76,425 shares ($6 million value)-11; other executives also hold meaningful stakesLow relative to institutional ownership (Vanguard holds 11.55%)-Executive compensation90%+ performance-based (equity and bonuses)-CEO earned over $16 million in 2025 despite stop-loss losses and stock stagnationFinal AssessmentThe Prudent View (For Management and Board)Voya's management and board have overseen significant growth in the core retirement and investment management businesses, with record net inflows, expanding assets under management, and pre-tax earnings exceeding $1 billion. The **dividend growth** (15% YoY) and **substantial share repurchases** ($6 billion returned since inception) demonstrate a genuine commitment to returning capital to shareholders. The OneAmerica acquisition has been executed successfully, and the balance sheet remains conservatively managed with low leverage and healthy excess capital. The 56% total shareholder return over five years outpaces many financial sector peers.The Critical View (Against Management and Board)The BenefitFocus acquisition at a 49% premium in January 2023 represents a material misallocation of shareholder capital—one that TOMS Capital correctly identifies as the primary driver of Voya's persistent valuation discount. Stop-loss underwriting failures necessitated a $37 million Q4 2025 reserve and contributed to a $10 million operating loss in that segment, despite management's repeated assurances of improvement. ROE has fallen by more than half since 2021, from 24.19% to 9.37%. Executive compensation ($16 million+ for the CEO in a year of stock stagnation) is difficult to justify given these setbacks. The board's average tenure of 6.5 years and approval of the BenefitFocus transaction raise legitimate questions about whether independent oversight is sufficiently robust.The Bottom LineManagement and the board have delivered strong results in the core retirement and investment management businesses, but a single flawed strategic decision—the $595 million BenefitFocus acquisition at a 49% premium—has undercut all of that goodwill and left shareholders with a stock that has gone nowhere for two years despite billions in capital returns.Whether management and the board should be removed depends on whether one believes the BenefitFocus acquisition was an isolated mistake in an otherwise strong record or symptomatic of deeper judgment issues. TOMS Capital clearly believes the latter. The market's verdict—a 30%+ valuation discount to peers—suggests many institutional shareholders agree.
+Jun 5, 20260Voya vs. peersTo evaluate Voya Financial fairly, it's essential to compare its performance in each key business segment directly to its main peers. The picture across the industry is mixed: while stop-loss insurance has become a significant challenge for nearly everyone, Voya's struggles are unique because its valuation is being heavily penalized for a specific strategic error that its core retirement peers have largely avoided.🏦 Retirement & Recordkeeping: A High-Caliber Player in a Consolidating MarketIn its primary business of providing 401(k) plans and other retirement services, Voya is a top-tier competitor, but it faces giants with greater scale.CompanyScale (Recordkeeping Assets)Recent Financial MomentumStrategic PositionVoya FinancialA leading provider, managing ~$1.1 trillion in client assets for nearly 10 million accounts.Mixed. Generated $28.2B in record net inflows in 2025, and segment pre-tax earnings were a healthy $959M. However, total revenue grew only 1.7% to $8.19B, and net income fell 2% to $613M.A core and profitable player, seen as one of the firms with the scale to survive ongoing industry consolidation-.Principal Financial Group (PFG)AUM of $781B, part of a larger AUA of $1.81 trillion.Strong. Revenue of $15.6B and net income of $1.19B in 2025. ROE of ~15.7% and adjusted EPS grew 12%, exceeding its own targets.A diversified powerhouse with strong performance across retirement, insurance, and asset management.Empower RetirementThe undisputed recordkeeping king, with AUA of $1.9 trillion across 88,000 plans.Robust. Generated $23B in net plan flows in 2025 and expects continued growth. Its growth has been fueled by aggressive acquisitions, making it a dominant force in the 401(k) market.The "gorilla" in the room, with unmatched scale to invest in technology and pricing.Fidelity InvestmentsA financial services titan with a massive $7.1 trillion in managed assets and $17.5 trillion in client AUA.Exceptional. Client assets under administration surged ~$10 trillion from 2021 to 2025. Its retirement plan business is consistently ranked top for its digital tools and plan sponsor services-.A category-defining leader that sets the benchmark for service, technology, and performance in the industry.How Voya Stacks Up: Voya is a formidable competitor and its record net inflows prove the business remains strong. However, its recent earnings growth is lagging behind a peer like Principal, which is delivering double-digit EPS growth. Furthermore, while Voya is a leading recordkeeper, it doesn't have the sheer, overwhelming scale of industry behemoths like Empower and Fidelity, which can offer pricing and technology that smaller competitors struggle to match.🏥 Stop-Loss Insurance: A Universal Pain Point for the Entire IndustryThe recent struggles in Voya's stop-loss insurance business are not an isolated problem. The entire industry is facing a crisis of rising claims, and nearly every major carrier is raising prices aggressively in response.Company/IndicatorLoss Ratio RealityMarket ResponseVoya FinancialSignificant losses, including a **$37M reserve** in Q4 2025. The unit posted an operating loss of ~$10M for the quarter.Announced it would raise stop-loss premiums at twice the rate of 2024-.Cigna GroupCigna's CFO reported its full-year loss ratio was between 90% and 95%, which was 4 to 7 percentage points higher than expected-.Will need significant price hikes to restore profitability; expects to get margins to desired levels by the end of 2027-.Industry Average TrendDeteriorated from 81.6% in 2019 to 86.0% in 2024-. 2025 claims are widely reported to have "well exceeded target loss ratios"-.Aggressive price increases are the norm. Industry renewals in January 2026 saw an average increase of 23%-.How Voya Stacks Up: The data shows Voya is suffering from the same adverse medical trends as everyone else, but it's in a particularly difficult spot. Unlike larger, more diversified rivals, Voya lacks the scale in health underwriting to absorb shocks or spread risk effectively. This makes its stop-loss problems more acute and has drawn intense activist scrutiny, while the market expects a diversified competitor like Cigna to eventually manage its way through a cycle.📊 Voya vs. The Peers: A Tale of Two StoriesWhen you combine the data, a clear pattern emerges that explains why the market is treating Voya so harshly.CompanyCore Retirement PerformanceStop-Loss / Benefits PerformanceMarket Sentiment & ValuationVoyaStrongRecord net inflows, $959M in earnings.Weak / Loss-MakingFacing acute issues, drawing activist pressure.Punished / DiscountedTrades at a forward P/E of <8x, a ~30% discount to peers.Principal FinancialStrong12% EPS growth, 15.7% ROE.ManageableDiversified insurance book; not a primary focus of negative attention.Rewarded / PremiumStrong growth and clear outlook rewarded by the market.Cigna GroupDiversifiedLess direct exposure. 401(k) is not their primary business.WeakOpenly disclosed industry-wide struggles.ResilientBenefits from scale; stock less punished, focusing on core PBM strength.💡 The Bottom LineVoya's problem isn't just that one of its segments is struggling—it's that it has two opposite stories happening at once. Investors give credit for the success in its core retirement business but have attached a persistent and heavy discount to the stock because of the twin failures of the BenefitFocus acquisition and the underperformance of its stop-loss segment.By contrast, a peer like Principal is rewarded for a well-executed, diversified strategy with strong growth across the board. Even a pure-play like Cigna, which openly acknowledges its stop-loss problems, benefits from having massive scale in health underwriting that convinces the market it can eventually fix the issue.If you're interested, I can also look into the operational metrics for these peers—things like participant growth, average account balance growth, or stop-loss market share. Would that be helpful?
+Jun 5, 20260AUM vs. AUACertainly. Here’s the difference in simple terms, using a retirement plan example.AUA (Assets Under Administration)What it means: Total assets that a financial firm administers — meaning they handle recordkeeping, reporting, statements, and plan management — but do not have the authority to make investment decisions or select investments.Think of AUA as:The firm is the administrator. They keep the books, track contributions, and send statements, but the client or another manager chooses the investments.AUM (Assets Under Management)What it means: Total assets that a financial firm actively manages — meaning they have discretionary authority to buy, sell, and select specific investments (stocks, bonds, funds) on behalf of the client.Think of AUM as:The firm is the investment manager. They decide where the money is invested and can trade without asking permission each time.Simple Example: A 401(k) PlanImagine a mid-sized company has a 401(k) retirement plan with $100 million in total participant savings.Voya is the recordkeeper for the plan. They track each participant's balance, process contributions and loans, send quarterly statements, and provide the website logins. Voya charges a fee for these administrative services.→ That $100 million counts toward Voya's AUA because they administer it.Within the 401(k) plan, participants can choose from a list of 20 mutual funds. Voya Investment Management runs one of those funds — a target-date fund — and has authority to decide which stocks and bonds to buy/sell inside that fund.→ The portion of the $100 million** that is invested in Voya's target-date fund (say **$15 million) counts toward Voya's AUM because Voya actively manages that money.Key Distinction TableAUA (Assets Under Administration)AUM (Assets Under Management)RoleRecordkeeper, custodian, administratorInvestment manager, discretionary decision-makerAuthority to trade?NoYesResponsibilityAccurate recordkeeping, reporting, plan compliancePortfolio construction, security selection, performanceFee basisPer-participant fee, flat administrative feePercentage of assets (e.g., 0.50% of AUM)ExampleVoya administering a 401(k) plan where participants pick Fidelity fundsVoya running a target-date fund inside that same planWhy It Matters for VoyaAs of 2025, Voya reports:AUA (retirement plan recordkeeping): Approximately $1.1 trillionAUM (actively managed assets, mostly through Voya Investment Management): Approximately $300+ billionThe AUA is much larger because Voya administers many plans where participants choose funds from other companies (BlackRock, Vanguard, etc.). Voya only earns active management fees on the portion that sits in its own funds (AUM).When analysts say Voya's retirement business is "strong but asset management fees are under pressure," they're often noting that AUM growth (high-margin) has lagged AUA growth (lower-margin administration).