AOL urges shareholder approval of its board nominees

Sat Jun 2, 2012 6:37pm EDT

A woman walks out of AOL offices in New York, November 19, 2009. REUTERS/Shannon Stapleton

A woman walks out of AOL offices in New York, November 19, 2009.

Credit: Reuters/Shannon Stapleton

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(Reuters) - AOL Inc, waging a proxy fight with activist hedge fund Starboard Value, said on Saturday its shareholders should approve all eight nominees for its board of directors after an advisory service recommended the approval of only six.

In a statement, the Internet and media company lauded a report by Institutional Investor Services calling for the rejection of Starboard's full slate of nominees, but said, "ISS reached the wrong conclusion in failing to recommend that AOL stockholders vote for all eight of the company's highly qualified director nominees."

The company also cited three straight quarters of better-than-expected earnings and said that, if elected to the board, Starboard Chief Executive officer Jeffrey Smith and investor Dennis Miller would slow AOL's momentum.

Starboard has a 5.3 percent stake in the company. AOL was spun off from Time Warner in 2009.

AOL said in a filing last month that Starboard would liquidate the company if its nominees won control of the board. Starboard has said AOL is not doing enough to return value to shareholders and has pushed for a 100 percent return on the proceeds of a patent sale.

Starboard did not immediately respond to requests for comment on Saturday.

AOL will hold its annual stockholders meeting on June 14.

(Reporting by Michael Hirtzer in Chicago; Editing by Peter Cooney)

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