EBay rejects Icahn board nominees, asks investors to do same

Mon Mar 10, 2014 7:22pm EDT

An eBay logo is projected onto white boxes in this illustration picture taken in Warsaw, January 21, 2014. REUTEwhite RS/Kacper Pempel

An eBay logo is projected onto white boxes in this illustration picture taken in Warsaw, January 21, 2014. REUTEwhite RS/Kacper Pempel

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(Reuters) - EBay Inc on Monday rejected activist investor Carl Icahn's two nominees to its board, saying both were unqualified, and urged shareholders to vote against them at its next annual meeting.

Icahn, who owns just over 2 percent of the e-commerce company, has been pressuring eBay for weeks to spin off its PayPal payments business. He has also repeatedly accused eBay of poor corporate governance.

The billionaire nominated Icahn Enterprises LP employees Daniel Ninivaggi and Jonathan Christodoro, both of whom Icahn regularly nominates to boards.

The chairman of eBay's corporate governance and nominating committee, Richard Schlosberg III, said the board considered both but rejected them because "neither nominee has relevant experience or expertise."

EBay said since each Icahn nominee currently sits on four public company boards, they are not in compliance with eBay's guidelines on "overboarding."

EBay founder and Chairman Pierre Omidyar in a statement urged shareholders to support the company's slate, which includes Chief Executive John Donahoe.

The company also said Donahoe's 2013 compensation fell by more than half to $13.8 million. That largely reflects the board's decision in 2012 to give him a one-time award of $14.8 million in performance share units, although eBay's weaker-than-expected financial performance also hurt his pay.

The company did not in its preliminary proxy statement set the date for its next annual shareholders meeting, which is expected to take place in the spring.

Icahn has sparred with eBay management via open letters and press releases since January, when the pugnacious billionaire made an unsolicited proposal for eBay to hive off PayPal.

The company has repeatedly said PayPal and eBay are better off as part of the same company.

In a fresh missive on Monday, Icahn accused Donahoe of "inexcusable incompetence" and said the fast-growing PayPal could "wither" if it remains part 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 said.

EBay called Icahn's comments "false and misleading."

"In pursuit of his own profit motives, Carl Icahn has made another unsubstantiated attack on John," eBay said.

EBay shares fell 1.4 percent to $58.22 on the Nasdaq.

(Additional reporting by Deepa Seetharaman in San Francisco; Editing by Richard Chang)

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Comments (6)
Butch_from_PA wrote:
what a scum bag. He could care less about any company or social endeavor other than bullying his way into a company for a quick profit then exit leaving his chaos behind. He is like a big fat living leach sucking America’s blood.

Once his large financial funds and lawyers dig their barbs into you – you cannot shake it off.

Mar 10, 2014 3:07pm EDT  --  Report as abuse
Whittier5 wrote:
While I would not argue with Butch, I have to observe that the eBay management probably are the same to an order of magnitude.
Many eBay users would use similar terms about dealing with eBay.

Mar 10, 2014 9:54pm EDT  --  Report as abuse
NetSales wrote:
From a discussion board thread: gopetersen wrote: Considering how little corporations actually have to reveal unless they are audited, there’s rarely any need to cook the books. I know they do it—I’ve seen it—but there’s no burning motivation to do it since the reporting requirements are a lot looser than most people realize. It’s more about juggling the numbers than changing them and that doesn’t get much scrutiny unless you peeze off shareholders. Sure- I mean, for all we know, PayPal could be making all the money, but since they’re the “same company” (at least when it suits them), they could just transfer cash from one entity to another- a “send money to friends and family” fee- free type of deal. Just think of all the “cash on hand” in that supposed interest free account where 21 day holds go to ferment. They try to be all self righteous and say “but we’re not collecting interest on it”, but they can still count it as cash on hand, and they do. Since they only pull that garbage on eBay sales, and they’re the “same company”, are they counting that as eBay “cash on hand”? Who knows? And I doubt the SEC cares, since eBay has recently been tapped by the government through the Obama Administration to help fleece Americans even more by pioneering ecommerce trade agreements. You think someone at SEC will want to touch that? C’mon. ROFL. It’s all a scam.”

Mar 10, 2014 12:16am EDT  --  Report as abuse
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