eBay Interim CEO Scott Schenkel sent an email to all employees on Thursday in response to the action taken by activist investor Starboard Value LP. In it, he asked them to stay focused, acknowledging that it wasn’t easy given the fact many employees were adjusting to fully working from home due to the coronavirus.
“As you work to adjust and care for your own family and teammates, remember that our seller community depends on us,” Schenkel said. “They are why we exist and why we work hard to improve our experience, improve service and improve the company.”
eBay was first targeted by activist investor Elliott Management in January 2019, and both companies won a seat on eBay’s board. On Thursday, Starboard published a letter to Chairman Tom Tierney urging eBay to hire an outside CEO and nominating four candidates to the board, initiating a proxy contest.
eBay responded with a statement of its own the same day, calling Starboard’s actions unreasonable, unwarranted, and detrimental.
Schenkel sent the following email to eBay employees on March 19, 2020:
Today Starboard Value, an eBay shareholder owning approximately one percent of the company’s outstanding shares, announced that it has nominated four candidates to stand for election to the eBay Board of Directors at our 2020 Annual Shareholder Meeting. You can read our response on ebayinc.com.
We listen to all shareholders and incorporate feedback into our strategy and plans where appropriate. Starboard is no different. In fact, Starboard appears to agree with the substance of the actions we’re taking to drive value, and given our engagement with them to date we believe their nominations and criticisms are unreasonable and unwarranted. Importantly, many eBay shareholders, analysts and public commentators have expressed support for the actions our Board and management are taking.
Because of your focus, drive and commitment, we’ve delivered results in line with or better than expectations for the past few quarters. As we shared at the last all hands, turning around the Marketplaces business is a huge opportunity that we’re focused on. Teams are executing the changes needed to deliver on the volume, revenue, and earnings commitments we made in January. Along the way, we have significantly improved margins and our Payments and Advertising initiatives are delivering growth. We’re refocused on healthy, sustainable GMV growth in areas where we have a right to win. In addition, we’re returning capital to shareholders with plans to buy back $4.5 billion worth of shares in 2020, and by increasing the dividend program by 14 percent compared to 2019.
The fact of the matter is that the entire eBay team — all of you — are getting the job done.
You will likely see many things in the media about Starboard’s nominations to the Board. I want to assure you that we’re handling this matter appropriately at the Board and senior management level. For our broader global team, the best thing you can to do is to stay focused on your team’s plans and deliverables.
Of course, this isn’t easy when many of us are adjusting to fully working from home given the new environment brought on by the coronavirus. Our sellers, most of whom are small and medium sized business owners, are also under enormous strain. Teams are working on plans to support and partner with them through these challenging times. As you work to adjust and care for your own family and teammates, remember that our seller community depends on us. They are why we exist and why we work hard to improve our experience, improve service and improve the company.
Thanks for all you are doing, and for leading through unprecedented times. Let’s keep supporting each other and keep our focus on our customers and come together as only eBay can.
Distribution: Global Employees
eBay published the letter in a filing with the SEC, where it also included information about its upcoming proxy statement (see definition on Investopedia), which it will send to shareholders informing them about matters to be brought up at the next shareholder meeting.
eBay noted it will file its proxy statement with the SEC and use a WHITE proxy card (Starboard Value is expected to use a different colored proxy card with its list of board nominees to help shareholders distinguish between the two).
eBay urged shareholders to read all relevant documents filed with the SEC before making any voting decision.