BOSTON Hedge fund manager Daniel Loeb on Friday urged Sotheby's investors to support his board slate, arguing he and his fellow nominees would be better able to reinvigorate the auction house from within after years of poor governance.
Loeb's Third Point is Sotheby's biggest investor with a 9.6 percent stake. For months, it and other activist investors have pressured the auction house to cut costs and return capital to shareholders.
Calling management and the board "reactive not visionary," Loeb said that Third Point's demands have led to a review of strategy and business practices, hiring of a new chief financial officer and reconsideration of capital allocation policies. Without "continued collaboration, progress will stall," he wrote.
The company said in a statement that "under the stewardship of Sotheby's board and management team, Sotheby's has delivered strong financial performance and superior shareholder returns, outperforming all relevant indices over the past one, five and ten year periods." The company added that it does not think Loeb has made a case that "change is warranted at Sotheby's."
Sotheby's annual meeting is on May 6 and they can choose between Loeb and Harry Wilson and Olivier Reza or for the company's slate which includes John Angelo and Jessica Bibliowicz.
Loeb complained that board members do not own enough stock in the company and thereby don't have enough skin in the game. He said the company has failed to articulate its brand and spends too much money, including on CEO compensation of between $6 million and $7 million a year. The CEO's perks, including an annual $25,000 automobile allowance and country club dues, "are throwbacks to a bygone era," Loeb wrote.
Loeb, one of Wall Street's most closely watched investors, last won board seats at Yahoo which allowed him to hand pick current the current CEO and remake the company.
(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio)