Hestia Capital Management has nominated its own Managing Member Kurt Wolf and six others to Pitney Bowes’ board, formally launching a proxy contest for a majority of the board the firm says is designed to help turn around the shipping and mailing company.
Pitney Bowes’ leadership, particularly Chairman Michael Roth and CEO Marc Lautenbach, must be held accountable for a ‘‘decade of dismal returns, driven by misguided strategy, failed execution and missed opportunities,’’ Hestia argued in a statement Monday announcing its seven-person slate for the company’s 2023 annual meeting.
The hedge fund advanced its own Chief Investment Officer Wolf, former Getty Images Chief Financial Officer Milena Alberti-Perez, former ShippingEasy CEO Katie May, and Ken McBride, who spent 20 years as the chief executive of Stamps.com.
The dissident slate also includes Todd Everett, who led online order fulfillment and logistics provider Newgistics until its 2018 sale to Pitney Bowes, corporate counsel Carl Grassi, and Lance Rosenzweig, a seasoned executive who has some experience in proxy contests. In 2021, Rosenzweig teamed up with NextGen Healthcare founder Sheldon Razin to push for a board overhaul, which was eventually rejected by shareholders.
Reacting to Hestia’s nomination notice, Pitney Bowes defended its nine-person board as ”strong, engaged, and diverse,” and noted that five longer-tenured directors stepped down and three new directors were named since 2018. The company accused Hestia of focusing on a fight instead of a settlement, claiming that in December it offered the activist two board spots, which the firm rejected.
Also on Monday, Hestia released a presentation outlining its concerns about how Pitney Bowes has been managed in recent years, pointing out that a series of poor strategic decisions and investments since 2015 have wiped out about $300 million in capital and drove down the stock more than 85%.
Turning to Pitney Bowes’ corporate governance, Hestia noted that the average director tenure exceeds 10 years and that several directors have a history with a company that was for many years led by Chairman Roth. The activist added that CEO Lautenbach has a $25 million golden parachute.
Pitney Bowes shares rose 6% Monday during regular hours and another 2% in after-hours trading.
Hestia’s move comes three months after it revealed plans to press for a raft of changes at Pitney Bowes. The firm now owns a 7.2% stake, making it the company’s third-largest shareholder.
In March 2018, Insightia’s Vulnerability module pointed to Pitney Bowes’ low valuation, weak profitability, and questionable corporate governance to argue that an activist could step in and agitate for a breakup.