SAN JOSE, Calif., March 19, 2020 /PRNewswire/ -- eBay Inc.
(Nasdaq: EBAY), a global commerce leader that connects millions of
buyers and sellers around the world, today issued the following
statement in response to the letter from Starboard Value LP
("Starboard") announcing that it has nominated four candidates to
stand for election to the Company's Board of Directors at eBay's
2020 Annual Meeting of Stockholders (the "2020 Annual
Meeting").
After extensive private discussions and engagement
with Starboard's representatives, eBay's Board believes Starboard's
nominations are unwarranted and unreasonable, particularly in light
of the decisive actions eBay has taken, and is taking, including a
CEO search process that includes external and internal candidates.
eBay's efforts have been positively received by our investors and
market analysts.
Starboard's "campaign platform" is constantly
changing and does not include useful suggestions or meaningful
content. The Board currently includes a principal of a major
activist investor (Elliott Management) and a director jointly
nominated and agreed upon with Starboard one year ago. These new
directors have been integrated into the board and their
perspectives and contributions are valued.
It is unclear what Starboard is hoping to
accomplish through the appointment of four more candidates, other
than to create unnecessary distraction and, as a relatively small
minority investor, to obtain an outsized role on the Board.
Moreover, we are disappointed that Starboard has decided to
announce its previously provided nominations amidst the global
COVID-19 pandemic while the Board and management are trying to
focus on the business, employee health and safety, and the
important CEO search and portfolio review that are underway.
eBay has maintained a frequent and substantive
dialogue with Starboard over the last 18 months. eBay's efforts
have been a genuine attempt to engage constructively; in our view,
Starboard's have not.
- In the first three months of 2020 alone, members of eBay's
Board and management team have had several discussions with
Starboard representatives to hear its views and to answer questions
about the Company's revitalized strategy, our plan for Classifieds,
and the Board's CEO search.
- As part of our engagement, eBay twice offered to enter into a
non-disclosure agreement in order to share more detailed
information on the Classifieds review process and CEO search. Our
purpose was to enable Starboard to understand the care, skill and
motivation of the Board and management in making decisions and
taking actions to serve the best interests of all eBay
shareholders. However, Starboard refused both offers.
- To help the eBay Board better understand and substantiate
Starboard's recommendations, eBay requested, on multiple occasions,
that Starboard provide analyses supporting its ideas, particularly
relating to operating margins. Starboard never responded to these
requests.
Starboard's thesis for eBay is ever evolving. It seems that
Starboard is searching for a "campaign platform" to support its
desire for an outsized role on the Board. The Company's Board and
management are already acting on every topic that Starboard claims
needs attention.
- Our Board has engaged in an extensive search process to
identify the next CEO for eBay. The Board is considering external
and internal candidates, and its priority is finding the best
possible person to lead eBay.
- eBay recently completed the sale of StubHub for $4.05 billion in cash, representing more than 25
times EBITDA.
- We are pursuing a process to unlock value for eBay's
Classifieds business, and will provide an update to our
shareholders by mid-year. We are in active discussions with
multiple parties.
Starboard appears to agree with the substance
of our actions with its primary concern being their timing.
However, all of the actions the Board and management are taking are
progressing at speed to maximize, not compromise, value.
eBay is delivering results. We are transforming
our business and strengthening our foundation for growth.
Highlights of our value enhancing actions include:
- Significantly improved margins. We delivered 2 points of
margin improvement in 2019 enabling 1 point of reinvestment in
Payments and Advertising, which are delivering incremental revenue
growth. We have announced a plan that delivers at least 2
additional points of operating margin by 2022, further extending
our margin rate well above peers.
- Increased focus on Marketplace volume growth with a
reorganization of the executive leadership team and a
re-prioritized customer-focused plan that includes improved
vertical buyer experiences, more data and tools for sellers, and
increased platform conversion leveraging an expanded structured
data foundation.
- Scaled Managed Payments in the U.S. and Germany. By 2022, Payments is expected to
generate an incremental $2 billion of revenue and $0.5 billion of operating income.
- Executed $5.0 billion in share
buybacks in 2019 and recently announced expansion of 2020 share
buyback plan from $1.5 billion
to $4.5 billion; deployed
$3.0 billion into an ASR (Accelerated
Share Repurchase) from StubHub proceeds immediately following deal
closure.
- Implemented eBay's first ever dividend in 2019 and is
committed to a 14% increase in 2020.
The Board and management are highly confident in eBay's
strategy. eBay will continue to take actions to drive value and
serve the best interests of eBay shareholders.
About eBay's Board of Directors
eBay's Board is composed of 14 independent, highly qualified
directors, including an independent Chairman, who together have the
experience and expertise necessary to oversee the strategic and
operational direction of the Company and management's execution.
These directors have proven track records as public company
executives, Board members and global business leaders, as well as
significant experience in the areas of technology, media, consumer
marketing, policy, large-scale operations and corporate
governance.
eBay is committed to fostering an environment that embraces
diversity and differing perspectives, including at the Board level.
Of the Company's current directors, 11 new directors were added
since 2015, including two shareholder representatives added last
year. eBay's directors have an average tenure of approximately
seven years and a median tenure of approximately four years. One of
eBay's goals in board refreshment is enhancing the diversity of the
Board, and to that end, three women have joined the Board since
2015.
eBay's Board will present the Board's recommended slate of
director nominees in the Company's definitive proxy statement and
other materials, to be filed with the U.S. Securities and Exchange
Commission and mailed to all shareholders eligible to vote at the
2020 Annual Meeting.
Advisors
The Company has retained Goldman Sachs & Co. LLC as its
financial advisor, and Wachtell, Lipton, Rosen & Katz as its
legal counsel.
About eBay
eBay Inc. (Nasdaq: EBAY) is a global commerce leader including
the Marketplace and Classifieds platforms. Collectively, we connect
millions of buyers and sellers around the world, empowering people
and creating opportunity for all. Founded in 1995 in San Jose, California, eBay is one of the
world's largest and most vibrant marketplaces for discovering great
value and unique selection. For more information about the company
and its global portfolio of online brands, visit
www.ebayinc.com.
Forward-Looking Statements
This press release contains forward-looking statements relating
to, among other things, the future performance of eBay Inc. and its
consolidated subsidiaries (collectively, the "company") that are
based on the company's current expectations, forecasts and
assumptions and involve risks and uncertainties. These statements
include, but are not limited to, statements regarding the planned
closing of and expected use of proceeds from the Company's senior
unsecured notes offering as described above. Actual results could
differ materially from those predicted or implied and reported
results should not be considered as an indication of future
performance. Factors that could cause or contribute to such
differences include, but are not limited to: changes in political,
business and economic conditions, any regional or general economic
downturn or crisis and any conditions that affect ecommerce growth
or cross-border trade; the company's ability to realize growth
opportunities in payments intermediation and advertising; the
outcome of the strategic portfolio reviews; fluctuations in foreign
currency exchange rates; the company's need to successfully react
to the increasing importance of mobile commerce and the increasing
social aspect of commerce; an increasingly competitive environment
for its business; changes to the company's capital allocation,
including the timing, declaration, amount and payment of any future
dividends or levels of the company's share repurchases, or
management of operating cash; the company's ability to increase
operating efficiency to drive margin improvements and enable
reinvestments; the company's ability to manage its indebtedness,
including managing exposure to interest rates and maintaining its
credit ratings; the company's need to manage an increasingly large
enterprise with a broad range of businesses of varying degrees of
maturity and in many different geographies; the ability to
successfully intermediate payments on the company's marketplace
platform; the company's need and ability to manage regulatory, tax,
data security and litigation risks; the company's ability to timely
upgrade and develop its technology systems, infrastructure and
customer service capabilities at reasonable cost while maintaining
site stability and performance and adding new products and
features; and the company's ability to integrate, manage and grow
businesses that have been acquired or may be acquired in the
future.
More information about factors that could adversely affect the
company's operating results and the market value of the notes
referenced above is included under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the company's most recent Annual Report
on Form 10-K, a copy of which may be obtained by visiting the
company's Investor Relations website at
https://investors.ebayinc.com or the SEC's website at www.sec.gov,
and under the caption "Risk Factors" in the prospectus supplement
and prospectus related to the offering. Undue reliance should not
be placed on the forward-looking statements in this press release,
which are based on information available to the company on the date
hereof. The company assumes no obligation to update such
statements. The information contained in, or that can be accessed
through, the company's websites (including, without limitation, the
Investor Relations website mentioned in this paragraph) is not part
of or incorporated by reference into this press release. Any
references to the company's websites are intended to be inactive
textual references only.
Important Information
eBay Inc. ("eBay") intends to file a proxy statement and WHITE
proxy card with the U.S. Securities and Exchange Commission (the
"SEC") in connection with the solicitation of proxies for eBay's
2020 Annual Meeting of stockholders (the "Proxy Statement" and such
meeting the "2020 Annual Meeting"). eBay, its directors and certain
of its executive officers will be participants in the solicitation
of proxies from stockholders in respect of the 2020 Annual Meeting.
Information regarding the names of eBay's directors and executive
officers and their respective interests in eBay by security
holdings or otherwise is set forth in eBay's proxy statement for
the 2019 Annual Meeting of stockholders, filed with the SEC on
April 19, 2019 (the "2019 Proxy
Statement"). To the extent holdings of such participants in eBay's
securities have changed since the amounts described in the 2019
Proxy Statement, such changes have been reflected on Initial
Statements of Beneficial Ownership on Form 3 or Statements of
Change in Ownership on Form 4 filed with the SEC. Additional
information can also be found in eBay's Annual Report on Form 10-K
for the fiscal year ended December 31,
2019, filed with the SEC on January
31, 2020. Details concerning the nominees of eBay's Board of
Directors for election at the 2020 Annual Meeting will be included
in the Proxy Statement. BEFORE MAKING ANY VOTING DECISION,
INVESTORS AND STOCKHOLDERS OF EBAY ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING EBAY'S
DEFINITIVE PROXY STATEMENT AND ANY AMENDMENTS AND SUPPLEMENTS
THERETO BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. These
documents, including the definitive Proxy Statement (and any
amendments or supplements thereto) and other documents filed by
eBay with the SEC, are available for no charge at the SEC's website
at http://www.sec.gov and at eBay's investor relations website at
http://investor.ebayinc.com. Copies may also be obtained by
contacting eBay Investor Relations by mail at 2065 Hamilton Avenue,
San Jose, California 95125 or by
telephone at 408-376-7493.
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SOURCE eBay Inc.