Activist hedge fund Third Point LLC stepped up its fight against Sothebys (NYSE:BID) by nominating three executives including its founder and chief executive officer Dan Loeb to the board of the international auction company, based on its latest filing with the Securities and Exchange Commission (SEC).

third point sothebys Dan Loeb

The two other executives nominated by Third Point were Harry Wilson, the chairman and CEO of MAEVA Group LLC, a corporate turnaround and restructuring boutique; and Olivier Reza, the lead designer and head of House of Alexandre Reza, an internationally renowned luxury jeweler in Paris.

Entrenched directors lack fresh perspective, claims Third Point

In its filing, Third Point stated that the entrenched directors of Sothebys (NYSE:BID) lack the fresh perspective required to overhaul its challenging operational structure and fix its cultural malaise.

According to the hedge fund, the current board of directors of the international auction company failed the metric in “QuickScore 2.0” guidelines for optimal board structure, which indicated that “tenure of more than nine years (can)…potentially compromise a director’s independence.” Third Point noted that 5 of the 12 current directors of Sothebys (NYSE:BID) have a tenure of more than 9 years and 75% of the current directors have been serving at least 7 years.

Third Point: Sothebys’ board lacks expert in corporate restructuring

The hedge fund added the entrenched board of Sothebys (NYSE:BID) does not have an expert in the type of corporate structuring it must undertake. Third Point emphasized that the board still needs to face challenging tasks such as critical cost cutting and further leveraging its brand and market knowledge to achieve bigger share of the global art profit pool. The hedge fund said the international auction company should refocus on online initiatives, increase private sales, and take a larger slice of the contemporary art market.

Third Point said, “It is a matter of concern to all shareholders that no Board member today possesses a demonstrated track record in this type of restructuring…All shareholders will benefit from further depth of experience in Sotheby’s key business building block: luxury customer relationship development.”

The activist hedge fund emphasized that the “poison pill” implemented by Sothebys (NYSE:BID) last October showed its refusal to fully embrace the desire of shareholders for change. “We believe the pill has been put into place solely to entrench the current board and is wrongful,” according to Third Point.

Third Point purchased an additional 200,000 shares bringing its total stake in Sothebys (NYSE:BID) to 6,500,000 shares or 9.53%.