Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Apr 26 2012 10:58:41

eBay 2012 Annual Shareholders Meeting

By: Greg Holden

Sponsored Link

Greg Holden is live-blogging the eBay Annual Shareholders meeting for EcommerceBytes again this year. The meeting is being held at eBay headquarters at 2161 North First Street, San Jose, California. Greg is reporting from Chicago where he is following the webcast of the meeting. First an introduction and agenda, the meeting is set to kick off at 8 am Pacific time.

Shareholders will vote on a number of agenda items, whether to declassify the Board of Directors and move to an annual election of directors, and whether to provide stockholders with the right to call a special meeting of stockholders.

Shareholders will also have a "say-on-pay" - an opportunity to express their views on the compensation of eBay's named executive officers. This is nonbinding, but eBay's board says it and the board's Compensation Committee "value the opinions of our stockholders and will take into account the outcome of this vote in considering future compensation arrangements."

The Agenda
1) To vote on the election of Marc L. Andreessen, William C. Ford, Jr., Dawn G. Lepore, Kathleen C. Mitic, and Pierre M. Omidyar as directors, to hold office until our 2015 Annual Meeting of Stockholders.

2) To approve, on an advisory basis, the compensation of our named executive officers.
http://sec.gov/Archives/edgar/data/1065088/000119312512121732/d284882ddef14a.htm#toc284882_13



3) To approve the amendment and restatement of our 2008 Equity Incentive Award Plan, including an amendment to increase the aggregate number of shares authorized for issuance under the plan by 16.5 million shares.

4) To approve our Employee Stock Purchase Plan.

5) To adopt and approve an amendment to our Amended and Restated Certificate of Incorporation to declassify our Board of Directors and provide for the annual election of directors.

6) To adopt and approve an amendment to our Amended and Restated Certificate of Incorporation to provide stockholders with the right to call a special meeting of stockholders.

7) To ratify the appointment of PricewaterhouseCoopers LLP as our independent auditors for our fiscal year ending December 31, 2012.

8) To transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting.

Greg Holden here -

Seven proposals:

1. Election of five directors to serve until 2015, including Marc
Andreesen, Bill Ford, Don Lepore, Katie Mitick, and Pierre Omidyar. No discussion

2. Approval on advisory basis of compensation of named executive officers.
No one from Occupy EBay speaks up to protest. See above for compensation chart!

3. 16.5 million shares, no discussion

4. approval of employee stock purchase plan.

5. approval of amendment for restated certificate of incorporation etc.

6. Amendment to provide stockholders with right to call a special meeting of stockholders.

7. Ratification of Price Waterhouse Coopers.
Don't they do the Academy Awards too?

All proposals approved in less than 10 minutes.



This is a remarkably quiet meeting...apparently no one from the Occupy movement is there.

John Donahoe acknowledges the presence of eBay sellers in the audience.

Remarks by John Donahoe:
"The changes we see going on in the ecommerce market and how we are positioning our company - your company-to be competitive in that market."
- 2011 results "hard to tell what year you're in sometimes."
- 17 % EPS growth, 27% revenue growth. Last year we enabled 150 billion of commerce volume in 2011

I notice he doesn't call this ecommerce volume. Why not?

PayPal revenue nearly $7B, Marketplaces $8B, GSI commerce $1.3B. PayPal, which doubled between 2008-2011, would double again, they predicted. eBay Marketplace would make a complete turnaround and "is on track with positive growth momentum." GSI, our latest acquisition, would show nice topline growth with margins of 14-16%.





"We're at an inflection point," Donahoe says. "There will be more change in how consumers will shop and pay over the next three years than there was over the past 10-20 years."

People consume media differently now that they have an iPad, he says.

"I want my news where I want it, how I want it, when I want it." In the same way, the same thing is about to happen to shopping and paying. Mobile devices are changing how consumers behave. Technology enabled consumers are leading it and merchants are adopting. Consumers feel like we have a mall in our pocket. They have access to both global and local markets on mobile devices.

Last year I would have said eBay participates in $500 e-commerce segment, and we think that will double.

Consumer behavior over last year has blurred lines between retail and e-commerce. Consumers accessed the Web in half of all shopping experiences.






John Donahoe's presentation continues....

Our addressable market is going from $500 billion to $10 trillion, led by consumers. Merchants all over the world are struggling to keep up with this change. Merchants need to have mobile presences as well as websites. Retailers want to go global.

Retailers say to eBay, we need help. Can you help us? Over past 18 months we have positioned company to drive these trends. We enable commerce. We want to help merchants of all sizes all over the world compete. We will never compete with them. This is just an extension of eBay's origins. Now we're helping large businesses (not small or medium size!).

PayPal: Leader in online payments. $125 billion in volume. Less than 3% lost in that figure. Growing at 25% rate. PayPal is out front in mobile payments. Grew 500-600% last year and processed $4 billion in mobile payments. We believe this will double to almost $7 billion. Now PayPal is going offline, pulled by large retailers like Home Depot. Go to terminal at check out, enter phone number and PIN, and you're done.

PayPal Here: Enables small retailers offline to accept PayPal. (Looks like the product Square that we just wrote about on ECommerceBytes.)







eBay Marketplaces has 105 million consumers around the world. New customers are coming to eBay. 9 percent new consumer growth in first quarter.

eBay mobile apps have been downloaded 78 million times. Last year more than $5 billion in volume. This year will do $8 billion. Fashion app lets you take picture of someone else's clothing and it will find a match on eBay.

GSI: "touches" $4 billion in ecommerce transactions. (Sounds creepy.)

X.commerce: our external facing platform, which lets developers and retailers access them directly. Have 800,000 active members of X.commerce today.

Mergers and acquisitions: three buckets.

1) expanding out geographic footprint,
2) acquire talent and technology,
3) enter adjacent markets and enhance product capabilities, such as Zong, the mobile payments company.

"I don't think anyone on the leadership team has ever felt more excited and optimistic about our future," he says.





Question & Answer Period
Question time. Shareholder asks about marketplace goals:

Traditionally eBay has been with small sellers, now you want to be the IT provider for all retailers. I'm wondering if this is forward looking for five reasons. Marketplace revenue growth is kind of modest; other retail chains are growing at a similar rate. Gross merchandise value is tiny compared to your addressable market - 1/2 of 1%. Even wal-mart is six times bigger. Even in e-commerce we're not that dominant. Inside of retail companies, they have IT groups that are doing IT now, they might be your competitors in a sense. There are IT companies supplying software to retail companies, like IBM and ORacle. These companies know how to do analytics, they know about the web-facing apps. My question is, why aren't they crawling up to us and begging us for solutions right now?

Donahoe: I look at the improvement in the marketplace growth and I think it's extraordinary, growing 10-15 %. Devin Wenig says we can do much better. On what you said about the large retailers, the reason we're now asking large retailers to put their inventory on eBay is that eBay consumers want it. They want maximum choice. If they can make that choice all in one marketplace, hat's what we're trying to deliver.

Retailers do have their own IT shops, but web technology is changing so fast, with social commerce, so fast - they're saying, we can't keep up. We're a software company. We're retail.

Second thing I would say, about other enterprise software companies like IBM, they are great companies, but none of them is focused solely on e-commerce and mobile commerce. We are. We believe we have capabilities that can help retailers deliver on that piece of their company better than the competition.

Wenig: I agree with your assessment; the way I look at marketplaces is, phase 1 was to build a safe and trusted marketplace, phase 2 is to accelerate that growth, geographic expansion is part of that. We're looking at using our data - a long term sustainable differentiator.

We're looking at starting to accelerate user acquisition. We look at our results and we say great, we've built this sustainable growth oriented business, and we build over that. Big retailers give us more synergy and diversity. The three divisions are helping each other.



Shelton Erlich:
Security: You mentioned 0.3% loss rate with PayPal. Why was it that high? Second, charitable donations. It seems to me that Congress needs to pass a law that you can only donate through PayPal to politicians. Because you have the database on lots and lots of people and people can't be crooks on PayPal. The other question, I'm an eBay buyer and stockholder - I can't imagine myself collecting sales taxes for $1000 in sales.

Donahoe: On sales tax, we hear you, and we're with you. We are working aggressively in Washington and we are lobbying so that, if Internet sales tax does happen, that small businesses are exempted from collecting sales tax for cross state transactions.

I agree with you on the political front. Politicians increasingly are using PayPal-

Erlich: Why don't you have a mini-ad on your website to make donations?

Donahoe (laughs): That's a (laughs) concept! I'll delegate that to you guys.

David Marcus on PayPal: 0.3% loss rate is much lower than a conventional website by a factor of two or three. Loss is all over the web. We have the most extensive database of transactions. You have to balance the fraud detection with the user experience. The only way to get zero fraud rate is to have zero transactions. People want to be safe first, then they want the user experience to be frictionless. We always have to balance this. The good news is that as more volume goes to mobile, we can provide more protection by leveraging in our risk models. We expect that to improve over time.



No more question, meeting wraps up!




Comments (6) | Leave Comment | Permalink

Readers Comments

Perminate Link for eBay 2012 Annual Shareholders Meeting   eBay 2012 Annual Shareholders Meeting

This user has validated their user name. by: Anonymous Annie

Thu Apr 26 11:30:49 2012

Those ''compensation'' numbers make me ill.

And for all that money that's floating around, eBay's ''Subscriptions'' page is still offline... rendering it impossible for sellers to unsubscribe from paid services that they had previously subscribed to.

But, I suppose it's an effective revenue generator when eBay PREVENTS sellers from unsubscribing... and forces sellers to CONTINUE TO PAY for services they no longer want or need, eh?

Disgusting.

Perminate Link for eBay 2012 Annual Shareholders Meeting   eBay 2012 Annual Shareholders Meeting

by: Consignment Pal Resale Directory This user has validated their user name.
Web Site

Thu Apr 26 12:11:15 2012

With baby boomers downsizing and businesses closing and liquidating assets, eBay should better support their eBay Trading Assistant consignment seller channel to meet demand.  

Love Greg's live-blogging!

Perminate Link for eBay 2012 Annual Shareholders Meeting   eBay 2012 Annual Shareholders Meeting

This user has validated their user name. by: Roger Rabbit

Thu Apr 26 14:08:14 2012

@ Anonymous Annie:
eBain is the greatest thing that has ever happened to that Greek running GSI since pre-sliced bread.

Perminate Link for eBay 2012 Annual Shareholders Meeting   eBay 2012 Annual Shareholders Meeting

by: pace306 This user has validated their user name.

Thu Apr 26 16:03:44 2012

Now we're helping large businesses (not small or medium size!).

NO EBAY FOR YOU!

Perminate Link for eBay 2012 Annual Shareholders Meeting   eBay 2012 Annual Shareholders Meeting

by: blaumann This user has validated their user name.

Thu Apr 26 23:12:53 2012

Donahoe is deserving of every penny. Who else has ever done such an effective job of destroying a great, unique company. Pierre back on the board. Will he be just a figurehead? Does he need a paycheck now that he has given away so much money?

Perminate Link for eBay 2012 Annual Shareholders Meeting   eBay 2012 Annual Shareholders Meeting

by: Digmen1 This user has validated their user name.
Web Site

Sun Apr 29 02:19:21 2012

Since when is one person worth $16 million dollars a year ?
Just because he happened to get a busisess degree and happened to get chosen to run a big corporation ?

Where is the justice in that ?



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