Sothebys (NYSE:BID) has been battling Dan Loeb’s Third Point firm for some time, as he tries to influence the company’s trajectory and management, seeing its shares as being undervalued. In a press release today, Loeb’s firm again urged shareholders of the auction company to support his slate of board nominees. Last week, he won a key ally in the fight, securing the support of the influential investor advisory firm Institutional Shareholder Services.
Dan Loeb’s firm is nominating Loeb himself, Harry J. Wilson and Olivier Reza. Sothebys (NYSE:BID) has nominated Jessica Bibliowicz, Robert Taubman and Daniel Meyer. In today’s press release, the firm called the company’s current board “complacent,” possibly “due to having no meaningful skin in the game,” and said that the board has “allowed poor operating and corporate governance practices to persist for too long.”
Third Point cites a “legacy of poor corporate performance”
The firm states that some of Sothebys (NYSE:BID)’s biggest shareholders have been offended by some changes that the board has made without their approval. For example, Sothebys adopted a poison pill without receiving their approval and did not hire a search firm to recruit nominees for its board. The release also states that the company didn’t interview Reza or Wilson before recommending that shareholders vote against their election.
Other examples the firm states are “questionable contributions” made by Sothebys (NYSE:BID), saying that the board chose Domenico De Sole, vice president of Aspen Art Museum’s board, right after or right before making a $500,000 contribution to the museum. And the list goes on and on.
Dan Loeb pushes for change
Loeb again states that Sothebys (NYSE:BID) “needs new blood.” He says his slate of shareholder nominees bring “a unique combination of expertise and fresh perspectives that will energize the Boardroom and add an owners’ perspective to a Board that lacks ‘skin in the game.'”
He says after his nominees are elected to the board, they will “dedicate significant efforts” to looking over Sothebys (NYSE:BID)’s corporate governance policies and push for better practices. Specifically, Loeb wants to get rid of the poison pill, separate the CEO and chairman roles, develop the company’s internal review process and enhance its decisions about and disclosures regarding compensation of its executives. He also wants to begin holding management accountable for the company’s results.