Stockholders re-elected all Box director nominees at the 2021 Annual Meeting
Key summary: In May 2021, Starboard nominated 4 directors to Box, Inc. At the AGM in September 2021, all of the company's director nominees were elected to the board.Market Cap: $4 billion | Box, Inc. provides a cloud content management platform that enables organizations of various sizes to manage and share their content from anywhere or any device.
Background:
On March 22, 2020, Starboard Value (7.7%) entered into an agreement with the company regarding the composition of the Board. Pursuant to the terms of the Agreement, three new independent directors joined the board before the annual meeting in June 2020, two incumbent directors didn't stand for re-election, and one incumbent director retired. Former GoPro CFO Jack Lazar will join the board, effective immediately. The second independent director will be selected from a Starboard-drafted list. The board will choose the third before the annual meeting.
Effective April 24, 2020, Bethany J. Mayer was appointed to the Board as the Second Independent Designee of Starboard.
Effective May 26, 2020, Carl Bass, Second Independent Designee of Starboard, was appointed to the Board as the Additional Independent Director. Source
On May 3, 2021, Starboard (7.7%) delivered an open letter to the stockholders in connection with the company’s 2021 AGM. It stated that it is increasingly frustrated with the poor financial results of the company and plans to nominate Board candidates at the next shareholder meeting. Further, Starboard stated that it urged management over the past two years to improve growth and profitability and had criticized questionable capital allocation decisions and subpar shareholder returns.
On May 10, 2021, Starboard delivered a letter to the company nominating four candidates for election to the Board at the 2021 AGM. In its letter, Starboard highlighted the company's significant valuation discount to peers due to years of missed expectations, poor results, and generally poor governance.
On May 20, 2021, Starboard (8%) submitted a books and records request regarding potential mismanagement and/or malfeasance by the management and/or members of the Board and potential breaches of fiduciary duties by certain members of the Board in connection with the company’s review of strategic options. Source
On June 3, 2021, the company rejected Starboard Value LP’s allegations against the company.
On June 10, 2021, Starboard delivered a letter to the company stating that it vigorously disagrees with counsel for the company’s contentions that the books and records request was deficient and purportedly did not establish a credible basis to infer any corporate wrongdoing. The Response Letter reiterates Starboard’s position that the seven purposes outlined in the Books and Records Request, including to investigate potential wrongdoing and breaches of fiduciary duties by members of the Board in connection with the Strategic Review, the Investment Agreement, the Series A Financing, the Dutch Self-Tender, and the company’s decision to extend the nomination deadline for the 2021 AGM, are not only proper under Delaware law (a fact which the June 3 Letter does not dispute), but that such purposes are directly aligned with the interests of the stockholders. Source
On July 1, 2021, Starboard filed proxy materials seeking support for its nominees and delivered a letter to the shareholders expressing its concerns on KKR financing. Starboard stated that on April 8, 2021, shortly after the expiration of the recently extended standstill and despite having more than $500 million of cash on its balance sheet even after completing two small acquisitions, Box announced a $500 million preferred equity financing led by KKR (“the KKR Financing”) and its intention to use the proceeds from the KKR Financing to repurchase $500 million of common stock through a “Dutch auction” self-tender. The KKR Financing was transparently structured to vote on an as-converted basis and required KKR and the other investors in the transaction to vote in accordance with the Board’s recommendations. Starboard stated its belief that Box had no need for the capital and that the transaction was specifically designed as an entrenchment mechanism meant to “buy the vote".
On August 6, 2021, Starboard issued an Investor Presentation titled “Unlocking Value at Box. In its presentation, Starboard reiterated its concerns over the company's poor performance and urged that the company should explore six opportunities to address the strategic implications uncovered in diligence.
On August 23, 2021, ISS recommended that stockholders vote FOR two company’s director nominees and Withhold votes on the election of one director nominee in connection with the company’s 2021 AGM. Source
On August 27, 2021, Glass Lewis recommended shareholders to vote FOR Starboard's representative Peter Feld at upcoming annual meeting. Source
Update:
On September 3, 2021, Egan-Jones recommended that Box stockholders vote on Starboard’s WHITE proxy card to elect all three of Starboard’s nominees to the Box Board. Source
At the AGM held on September 10, 2021, shareholders elected all the company's director nominees to the Board.