eBay CEO John Donahoe along with members of the eBay Board will face shareholders on May 13th. eBay is holding its annual shareholder meeting a little later this year, perhaps because it finds itself being targeted by investor shareholder Carl Icahn. Since 2009, eBay has held the meeting in late April – last year, it was actually held on April 18th. This year, the eBay Board of Directors and those shareholders who wish to attend in person will gather in San Jose, California, on May 13th.
eBay informed shareholders on Tuesday it had submitted a definitive proxy statement with the SEC; it had filed a preliminary proxy statement 2 weeks ago.
eBay is giving itself an extra week between announcing first quarter earnings and holding the annual meeting. eBay has typically announces Q1 earnings in mid or late April – this year, it will announce earnings on April 29th, a full 2 weeks before the annual meeting.
Icahn began communicating with eBay CEO John Donahoe in January of this year, letting him know that he would be nominating two of his own people to the eBay Board of Directors and submitting a proposal that eBay spinoff PayPal.
In its letter to shareholders on Tuesday, eBay made a case yet again for why they should not vote for Icahn’s board nominees but instead for its own selection, and why it believed spinning off PayPal was a mistake at this time. The letter, signed by eBay CEO John Donahoe, Chairman of the Board Pierre Omidyar, and Lead Independent Director Thomas Tierney, accused Icahn of making distorted attacks in the media:
“Rather than debate the merits of his proposal, Mr. Icahn has launched an aggressive media campaign to attack the management and directors of eBay. His distorted attacks, despite being the centerpiece of his campaign, have been disproven by the facts. Mr. Icahn has a long history of using personal attacks as a means to his own ends. We believe his public attacks have been counterproductive and are an attempt to distract attention from eBay’s long track record of delivering results for eBay’s shareholders.
“More recently, Mr. Icahn has backed away from his proposal to spin off PayPal into a separately traded public company and from his arguments that PayPal would be more successful as a standalone company. He has announced a “new” idea – a carve-out IPO of PayPal. We’re glad to see that Mr. Icahn now seems to agree that a full separation of PayPal is not a good idea.”
It’s not just shareholders eBay is communicating with about Carl Icahn’s proposal – Donahoe has written letters to employees, followed by a video in which he praised them for not letting the media attention distract them:
“I just want to wrap up by saying how proud I am of how all of you have not been distracted since Carl Icahn came onto the scene. And I want to thank you in advance for continuing to do that. The noise is going to get louder over the next four to six to eight weeks. Don’t pay attention to the noise. Stay focused, and don’t be distracted. That’s the best way we can deliver for our customers, for ourselves, and for our shareholders.
Carl Icahn has criticized Donahoe’s performance at eBay as well as the Board’s governance, and initially proposed eBay spin off 100% of PayPal. Icahn has since come up with an alternative proposal, suggesting eBay conduct an Initial Public Offering (IPO) of PayPal in which it sells 20% to the public. “eBay would retain 80% of PayPal with control. Before the transaction is consummated the companies could enter into a long-term, commercially viable contract, preserving all synergies.” eBay’s Board said that proposal was no more palatable than a 100-percent spinoff of PayPal.
Icahn has been publishing his letters to eBay shareholders on a site called ShareholdersSquareTable.com .
And eBay created a resource to keep track of its communications about the proxy battle called eBay and PayPal – Better together.