Activist investor Starboard Value is pressuring eBay for the second time in two years and said on Thursday that it plans to install four directors on the e-commerce company’s 14 member board.
The hedge fund, which last year helped fill one board seat, said the board had been slow in changing its chief executive and tackling issues including separating eBay’s classifieds business from its marketplace business.
Starboard said in a letter that it wants the board to appoint an outsider as permanent chief executive after eBay has been headed by an interim CEO for six months. In September Devin Wenig stepped down after disagreements with the board and Scott Schenkel, eBay’s chief financial officer, was appointed interim CEO.
“Given our concern over certain historical decisions, we worry that the board may default to an internal candidate,” Starboard wrote.
Starboard’s nominees include Peter Feld, the hedge fund’s director of research, who has considerable experience investing in technology companies. The firm also nominated Shannon Brayton, who most recently served as the chief marketing officer of LinkedIn, Eddy Hartenstein, who currently serves as the lead independent director on Broadcom Inc’s board, and Stephanie Tilenius, the CEO of Vida Health, who has previously worked at Google.
Starboard, which owns more than 1% of eBay common stock, has been holding private discussions with the company for months but moved ahead with a proxy fight this week to publicly push its case for hiring a “world-class experienced leader for eBay.”
Reports last week, citing people familiar with the matter, that Starboard would nominate a minority slate of directors.
Roughly a year ago, eBay handed two board seats to activist investors. Jesse Cohn, a portfolio manager at Elliott Management, which had also been pushing for changes, joined the
board along with Marvell Technology Group’s Matt Murphy, who was backed by Starboard. Elliott owns 4% of eBay.
Last month Intercontinental Exchange Inc (ICE), the owner of the New York Stock Exchange, said it had approached eBay Inc to explore “a range of potential opportunities.” But it said eBay had “not engaged in a meaningful way” and it was not in negotiations regarding the sale of all or part of eBay.
eBay sold StubHub to ticket reseller Viagogo Ltd for $4.05 billion in November. The company has said that it plans to release an update on the classifieds business by the middle of the year.
eBay’s shareholder meeting is expected to be held in June.