On the Heels of ISS & Glass Lewis’ Recommendation to Vote Engaged Capital’s White Proxy Card, Rovi Adopts Compensation Ch...
May 04 2015 - 8:30AM
Business Wire
- Facing pressure from Engaged Capital,
Rovi adopts board compensation changes in an 11th hour attempt to
address years of outsized director pay
- Rovi Board finally acts on reforms it
acknowledges were overdue
- 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), responded
today to Rovi’s announcement of new compensation arrangements for
its independent directors.
“After years of receiving outsized compensation at the expense
of shareholders, we find it incredibly disingenuous that Rovi’s
Board has finally decided to address its excessive director pay
practices less than two weeks prior to the Annual Meeting and after
both leading proxy advisory firms recommended that shareholders
vote on Engaged Capital’s WHITE proxy card,” said Glenn W. Welling,
CIO of Engaged Capital.
No one should be fooled by Chairman Ludwick’s claim that
director compensation just recently “became outsized relative to
[Rovi’s] new peers.” Rather, we firmly believe that director pay
has been excessive for years. As noted in our April 23
presentation, compensation received by Rovi’s incumbent directors
(over $300,000) in 2014 was ~60% higher than
similar sized, mid-cap companies and even ~25% higher than large-cap companies. Given that
Rovi announced the divestiture of DivX in late 2013, worked to change its peer group in
mid-2014, and finalized its 2015
compensation plan in February, which
included no changes to director pay, we find it extremely curious
that the Board suddenly realized its new peer group warranted an
additional review of Rovi’s director compensation policies.
We believe the announced changes are solely a reaction to our
campaign and we seriously question the motivation behind this
announcement. Shareholders must ask themselves, was this a
proactive corporate governance improvement made by a board aligned
with shareholders? Or was this simply a reactive, 11th hour attempt
to gain votes in a proxy contest made by an entrenched Board
desperately trying to maintain the status quo?
“As noted by both independent proxy advisory firms, ISS and
Glass Lewis, the board refuses to hold themselves accountable. This
is a further demonstration of why all of Engaged Capital’s nominees
are urgently needed in the boardroom to bring a fresh,
shareholder-focused perspective,” concluded Mr. Welling.
Rovi shareholders are urged to vote the WHITE proxy card to elect Engaged Capital’s
three highly-qualified director candidates, David Lockwood,
Raghavendra Rau and Glenn W. Welling, at the May 13, 2015 Annual
Meeting of Rovi.
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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