eBay responded to a letter its Board of Directors received this morning from activist investor Starboard Value LP pressuring it to hire an outside candidate for its CEO position and add four new members to its Board of Directors.
Starboard told the Board it was primarily focused on eBay’s CEO search process and the development of an improved operating plan. It called on eBay to find an external candidate for its open CEO post, a role former Chief Financial Officer Scott Schenkel is filling on an interim basis.
eBay called Starboard’s actions “unwarranted, unreasonable and detrimental to the company.”
As EcommerceBytes reported this morning, Starboard nominated the following executives to eBay’s board for voting at the 2020 shareholder meeting: Starboard’s own Peter Feld; former eBay executives Stephanie Tilenius and Shannon (Stubo) Brayton; and Eddy Hartenstein, former publisher and CEO of the Los Angeles Times Media Group.
eBay wrote in its statement this afternoon, “It is unclear what Starboard is hoping to accomplish through the appointment of four more candidates, other than to create unnecessary distraction and, as a relatively small minority investor, to obtain an outsized role on the Board.”
Starboard had addressed its reasons when it had written in this morning’s letter to the eBay board: “During our time as shareholders of eBay, it has become increasingly clear that the current Board has had difficulty making the critical decisions that the Company has needed, as evidenced by the delay in making a CEO change that seemed inevitable after sustained underperformance, acceptance of a subpar operating plan following an eight month-long Operating Review, as well as the delay in the Strategic Review of eBay’s non-core businesses.”
eBay said it has and is taking decisive actions, “including a CEO search process that includes external and internal candidates. eBay ‘s efforts have been positively received by our investors and market analysts.”
eBay said it was delivering results, transforming its business and strengthening its foundation for growth and highlighted some of its “value enhancing actions” that included:
- Significantly improved margins. We delivered 2 points of margin improvement in 2019 enabling 1 point of reinvestment in Payments and Advertising, which are delivering incremental revenue growth. We have announced a plan that delivers at least 2 additional points of operating margin by 2022, further extending our margin rate well above peers.
- Increased focus on Marketplace volume growth with a reorganization of the executive leadership team and a re-prioritized customer-focused plan that includes improved vertical buyer experiences, more data and tools for sellers, and increased platform conversion leveraging an expanded structured data foundation.
- Scaled Managed Payments in the U.S. and Germany. By 2022, Payments is expected to generate an incremental $2 billion of revenue and $0.5 billion of operating income.
- Executed $5.0 billion in share buybacks in 2019 and recently announced expansion of 2020 share buyback plan from $1.5 billion to $4.5 billion; deployed $3.0 billion into an ASR (Accelerated Share Repurchase) from StubHub proceeds immediately following deal closure.
- Implemented eBay’s first ever dividend in 2019 and is committed to a 14% increase in 2020.
You can read eBay’s full statement on the eBayInc.com website.