Glass Lewis Joins ISS in Recommending That Rovi Shareholders Vote for Change on Engaged Capital’s WHITE Proxy
May 01 2015 - 8:30AM
Business Wire
- Glass Lewis joins ISS in recommending
Rovi shareholders vote on Engaged Capital’s WHITE proxy to elect Raghavendra Rau and
Glenn W. Welling
- Glass Lewis says investors would
benefit from shareholder representation in the Rovi boardroom
- Engaged Capital urges Shareholders to
vote on the WHITE proxy card to
elect David Lockwood, Raghavendra Rau and Glenn W. Welling
Engaged Capital, LLC (“Engaged Capital”), an investment firm
specializing in small and mid-cap North American equities and
beneficial owner of 550,000 shares of the common stock of Rovi
Corporation (“Rovi” or the “Company”) (Nasdaq: ROVI), today
announced that Glass Lewis & Co. (“Glass Lewis”), a leading
independent proxy voting advisory firm, has recommended that Rovi
shareholders vote on the WHITE
Engaged Capital proxy card to elect Engaged Capital’s
highly-qualified director candidates, Raghavendra Rau and Glenn W.
Welling, at the May 13, 2015 Annual Meeting of Rovi.
Glass Lewis’ recommendation echoes the recommendation of
Institutional Shareholder Services (“ISS”) received earlier this
week that shareholders vote on the WHITE Engaged Capital proxy card. Engaged
Capital urges all Rovi shareholders to vote for change on the Rovi
Board by voting the WHITE proxy
card for all three Engaged Capital nominees TODAY.
Glenn W. Welling, Principal and CIO of Engaged Capital,
responded to Glass Lewis’ report saying, “We are gratified both
leading independent proxy advisory firms, Glass Lewis and ISS, have
recognized the need for change at Rovi and have endorsed our
efforts to improve its board. The incumbent board has evaded
responsibility for substantial value destruction and must be held
to account.”
Glass Lewis recommended that shareholders vote on the
WHITE Engaged Capital Proxy
card stating:
“…we consider the present solicitation revolves around whether
independent investors should replace a minority of those directors
who unquestionably oversaw unchecked value destruction, mediocre
strategic execution, poor compensation practices and mediocre
responsiveness to investor concerns. Afforded a full scope on these
issues, we believe Engaged Capital successfully argues in favor of
change to the status quo as a means to promote a thoughtful review
of the Company's strategy, operational architecture and corporate
governance framework.”
Glass Lewis questions the success of the Board's
"transformation" efforts and their plan for the future:
“…despite overseeing the single most value destructive
transaction in the Company's history and an array of more recent
strategic endeavors that have failed to move the needle
meaningfully in terms of operating metrics or shareholder returns,
we note the board elects to draw direct attention to a fresh round
of investments in "next-gen growth products" that are expected to
drive significant top-line growth, "in 2017 and beyond"… We believe
investors should greet this framework skeptically.”
Glass Lewis critiques the Board's track record of value
destruction and cherry-picking metrics noting:
“…the board employs questionable analytical methodologies and
points to recent executive changes and a convenient "reset" date in
an effort to draw investor focus away from the failures overseen by
the overwhelming majority of the current directors and toward the
exceptionally compelling -- but perpetually distant – operational
horizon. With these and other factors in mind, we believe the
Dissident successfully argues all investors would benefit from
fresh perspectives in the Rovi board room.”
“Readily evident is the fact that Rovi has underperformed all of
the selected benchmarks over each of the selected review periods,
in some cases by substantial margins. Indeed, even setting aside
the Company's relative performance, we note Rovi's absolute returns
are all negative, suggesting few investors share the board's
optimism with respect to management's ongoing strategic
rebranding.”
Glass Lewis questions the Board's lack of accountability and
responsiveness to shareholders:
“Ultimately, we find the board's case -- essentially that
shareholders should focus on the benefits and results of Rovi's
"reset" efforts – is entirely too deferential to management and
lacking in hindsight. As a matter of primacy in this regard, we
believe the board too easily bifurcates culpability for failures
predating the current rebuilding phase by pointing to an array of
executive level changes and a revamped product development
effort.”
“Nowhere is it apparent, however, that this high-level refresh
included an extensive evaluation as to whether those directors
overseeing the massive loss of value associated with the Sonic
transaction -- five of whom continue to serve on the board --
should be replaced by new members.”
“…we believe Engaged Capital successfully argues in favor of
change to the status quo as a means to promote a thoughtful review
of the Company’s strategy, operational architecture, and corporate
governance framework.”
ROVI SHAREHOLDERS, GLASS LEWIS AND ISS HAVE
SPOKEN, THE TIME FOR ACTION IS NOW. VOTE YOUR WHITE ENGAGED CAPITAL PROXY FOR EACH OF THE
ENGAGED CAPITAL NOMINEES TODAY.
If you have any questions, or require
assistance with your vote, please contact Morrow & Co., LLC,
toll- free at (800) 662-5200, call direct at (203) 658-9400 or
email: engaged@morrowco.com
About Engaged Capital:
Engaged Capital, LLC (“Engaged Capital”) was established in 2012
by a group of professionals with significant experience in activist
investing in North America and was seeded by Grosvenor Capital
Management, L.P., one of the oldest and largest global alternative
investment managers. Engaged Capital is a limited liability company
owned by its principals and formed to create long-term shareholder
value by bringing an owner’s perspective to the managements and
boards of undervalued public companies. Engaged Capital manages
both a long-only and long/short North American equity fund. Engaged
Capital’s efforts and resources are dedicated to a single
investment style, “Constructive Activism” with a focus on
delivering superior, long-term, risk-adjusted returns for
investors. Engaged Capital is based in Newport Beach,
California.
Shareholder:Morrow & Co., LLCTom Ball,
203-658-9400tomball@morrowco.comorJohn Ferguson,
203-658-9400jferguson@morrowco.comorMedia:Bayfield
Strategy, Inc.Riyaz Lalani,
416-907-9365rlalani@bayfieldstrategy.com
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