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eBay Calls Starboard Actions Unreasonable and Detrimental

eBay
eBay Calls Starboard Actions Unreasonable and Detrimental

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.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

5 thoughts on “eBay Calls Starboard Actions Unreasonable and Detrimental”

  1. Maybe a stretch, but this is akin to Starboard being an HOA and telling ebay that it’s house needs painting.
    …and ebay refuses, all the while ignoring the coming meltdown of it’s Chinese sellers.
    Maybe the ebay execs WERE born last nite…

  2. This was my response on the Finance site where the response was posted.

    None of you have a clue do you. You keep restating the same incorrect BS information again and again. Have you looked at your stocks? No one is buying it or from you anymore. Your buyer/seller base is off by at least 20% and likely higher. You are sinking because of your need for China, which I may add is disastrous in the current environment.

    The board has become a joke. If any of you are over the age of 60, I suggest you start staying home and practise social distancing before you make the rest of the country nauseous with your inadequacies.

    The game is over eBay BOD and you are all complicit in the destruction of a once viable and profitable business. Time to retire……most of you. I say Elliot and Starboard stay. A refreshing sign of intelligence for once.

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