Veteran activist says CEO should be fired and PayPal unit sold immediately
Online retailer eBay, which is locked in a proxy struggle with Carl Icahn, has rejected board members proposed by the activist investor and says its CEO’s pay fell by more than half last year.
The retailer says Icahn nominees Daniel Ninivaggi and Jonathan Christodoro, both employees of the billionaire, are ‘not qualified’ for the job. The company has nominated four candidates for re-election, including chief executive John Donahoe.
The nominating committee ‘gave serious consideration to [Carl’s] two employees,’ says Richard Schlosberg, the independent director who heads the nominating committee, in a note to investors.
‘Neither nominee has relevant experience or expertise. In addition, neither nominee would comply with the board’s governance guidelines on overboarding: each is already on four public company boards and Ninivaggi is co-CEO of Federal-Mogul.’
EBay has also announced that Donahoe’s compensation dropped by 53 percent in 2013 to a total of $13.8 mn, partly due to the company’s weaker share performance. But Donahoe received a one-time payment of $14.8 mn in 2012, and the lack of a similar payment this year accounts for most of the decrease in compensation.
In a heated response to eBay’s announcement, Icahn, who wants the company to spin off its PayPal unit, accuses the company of ‘a lack of accountability’ and says ‘transgressions by management are swept under the rug by crony boards.’
‘Who can doubt that if eBay were a private company, Donahoe would be fired when the facts were disclosed to the owners?’ Icahn writes in his filing with the SEC. ‘I believe if it is left as a division of eBay, PayPal may well go the way of other former technology greats such as BlackBerry, Dell, Eastman Kodak, Polaroid, Nintendo, Xerox, Sony, Palm and AOL.’
Icahn, who owns a 2 percent stake in eBay, also accuses the company of selling Skype prematurely and costing eBay investors $4 bn in lost opportunity.
The activist recently dropped a campaign against Apple after his resolution calling for an increase in buybacks at the tech giant failed to receive backing from ISS and major shareholders.
