|Mon Feb 24 2014 09:57:33|
eBay Defends Board Members Against Carl Icahn's Attack
By: Ina Steiner
eBay had to go on the defensive in the wee hours Monday morning after "activist shareholder" Carl Icahn, who is seeking two seats on eBay's board, accused two current board members of having conflicts of interest and suggested Marc Andreessen and Scott Cook immediately resign. His battle against eBay kicked off last month when he submitted a non-binding proposal for eBay to spin off PayPal into a separate company.
On Monday, Icahn published an open letter to eBay shareholders saying he had discovered multiple lapses in corporate governance.
"We have found ourselves in many troubling situations over the years, but the complete disregard for accountability at eBay is the most blatant we have ever seen. Indeed, for the first time in our long history, we have encountered a situation where we believe we should not even have to run a proxy fight to change the board composition. Rather, we believe that in any sane business environment these directors would simply resign immediately from the eBay Board, either out of pure decency or sheer embarrassment at the public exposure of the extent of their self-serving activities."
He also had words for eBay CEO John Donahoe: "While Mr. Donahoe is feeding information to competitors on the eBay Board and selling the company's assets to board members, notable PayPal architects including Elon Musk and David Yammer are publicly questioning his strategy."
eBay quickly shot back in a press release published just after 6 am Pacific defending Andreessen and Cook, calling them two of the most respected, accomplished and value-driven technology leaders in Silicon Valley.
"Marc Andreessen and Scott Cook bring extraordinary insight, expertise and leadership to eBay's board, which is scrupulous in its governance practices and fully transparent with regard to its directors' other affiliations and businesses. And eBay Inc. President and CEO John Donahoe is widely respected for his turnaround of eBay and leadership of the company over the past six years."
PayPal's former president was also dragged into the war of words. Icahn wrote, "In an environment where an accomplished leader such as Scott Thompson, the former CEO of Yahoo, is dismissed for adding two words, Computer Science, to a degree from Stonehill College, it is incredible that so many blatant indiscretions at eBay have been tolerated by Mr. Donahoe and the other board members."
Icahn said Donahoe appeared to "lack awareness about what is going on around him on his board and in the marketplace," and called his general stewardship of the company myopic.
He said eBay needs fresh stockholder representation on the board to avoid becoming yet another example of a technology company with a management team and board that refused to adapt, citing Blackberry, Dell and AOL, among others.
eBay characterized Icahn's letter as "mudslinging attacks."
You can find Icahn's letter on ShareholdersSquaretable.com. eBay's response is found on the eBay blog.