Believes Board’s Refresh Fails to Address
the Ineffective Leadership of CEO Marc Lautenbach, who has Overseen
Dramatic Balance Sheet Deterioration and -50% TSR Despite Receiving
~$67 Million in Compensation Since 2012
Concerned New Chair Robert Dutkowsky Holds
Four Public Company Director Roles, Maintains Two Public Company
Chairman Roles, Overlapped at IBM with Mr. Lautenbach and Served on
Committees That Perpetuated Failings at Pitney Bowes
Modifies Slate to Include Five Nominees with
Experience in Capital Allocation, Corporate Governance, Capital
Raising, Logistics, the Postage and Shipping Sectors, and
Turnarounds
Provides a Framework for Improving Cashflow
by Curtailing Global Ecommerce Segment’s Excessive Cash Burn and
Reducing Corporate Costs, While Pursuing Margin Enhancement and
Growth Opportunities in SendTech and Presort Units
Remains Willing to
Settle for Reduced Board Representation, Provided a CEO Succession
Process Immediately Commences and There is a Pivot Away from the
Company’s Seemingly Failed Strategy
Hestia Capital Management, LLC (collectively with its
affiliates, “Hestia” or “we”), which is the third largest
stockholder of Pitney Bowes, Inc. (NYSE: PBI) (“Pitney Bowes” or
the “Company”) and has a beneficial ownership position of 8.4% of
the Company’s outstanding common stock, today announced that it is
filing a preliminary proxy statement with the U.S. Securities and
Exchange Commission in connection with its nomination of five
highly qualified and independent candidates for election to the
Company’s Board of Directors (the “Board”) at the 2023 Annual
Meeting of Stockholders (the “Annual Meeting”). Hestia’s nominees
are Milena Alberti-Perez, Todd Everett, Katie May, Lance Rosenzweig
and Kurt Wolf. The Hestia slate intends to issue a detailed
strategy and operating plan in the coming weeks.
Mr. Wolf, the Founder and Chief Investment Officer of Hestia,
commented:
“Although Pitney Bowes validated our case for change by
announcing plans to replace three extremely long-tenured directors,
we believe the Board’s marginally positive refresh fails to address
the Company’s value-destructive strategy and failed leadership
while perpetuating certain governance issues. The Board actually
doubled down on Chief Executive Officer Marc Lautenbach despite his
apparent commitment to running a capital-intensive and seemingly
failed strategy that has resulted in many years of cash flow
deterioration, credit downgrades and negative stockholder returns.
To make matters worse, the Board has appointed Robert M. Dutkowsky
as Chair despite his apparent interlocks through their past at IBM,
and likely close personal ties to Mr. Lautenbach. Further, Mr.
Dutkowsky currently holds four public company director roles and
maintains two public company chairmanships. Mr. Dutkowsky, who
failed to avert a very costly proxy fight at U.S. Foods Holding
Corp. last year and resisted changing a failed strategy there,
appears to have an array of other commitments with organizations in
the Tampa Bay area and did not seem to distinguish himself as an
advocate for stockholders when serving on important Pitney Bowes
committees.1 It is also important to note that the Board’s refresh
was not accompanied by commitments to address glaring issues,
including Pitney Bowes’ six credit downgrades and $1.7 billion in
debt maturities over the next six years, that we have raised since
our private engagement began with the Company last summer.
While our proxy statement details four separate attempts to
reach productive compromises with Pitney Bowes, the Board’s
apparent inflexibility and unwavering commitment to Mr. Lautenbach
has made meaningful compromise impossible in our view, compelling
us to run five director candidates for election at the Annual
Meeting. We have modified our slate to include five highly
qualified, independent director candidates with the exact
backgrounds and skills Pitney Bowes needs:
- Capital allocation and debt reduction acumen;
- Strategic planning and company turnaround expertise;
- Governance insight and prior boardroom experience;
- Leadership and prior c-level experience;
- Vast postage, shipping and technology knowledge;
- Recruitment, human capital management and succession planning
knowhow;
- Broad and valuable industry relationships, and;
- Ownership perspectives.
Our candidates look forward to working with the incumbent
directors, including new appointees Steven Brill and Darrell
Thomas, to implement a viable long-term strategy that prioritizes
core, cash-generating segments that have margin expansion and
growth opportunities. We have actionable ideas for immediately
helping Pitney Bowes accelerate profitability in Global Ecommerce
and make targeted investments in SendTech and Presort to restore
financial strength ahead of significant upcoming debt maturities.
We believe any objective review of Pitney Bowes’ financial
position, strategy, failed execution and overall trajectory should
reveal there is still a need for urgent and meaningful change
beyond just the appointment of Hestia nominee Katie May. With all
of this said, we remain willing to compromise with the Board if Mr.
Lautenbach departs as part of a well-run succession process and
there is a commitment to finally adjust the corporate
strategy.”
Hestia’s director candidates look forward to working with the
remaining incumbents on the Pitney Bowes Board. Our slate, which
includes a number of experienced c-level leaders, is:
CANDIDATE
KEY QUALIFICATIONS
RATIONALE FOR
NOMINATING
Milena Alberti-Perez
- CFO experience
- Board and Governance experience
- Audit, M&A and Capital Allocation experience
- Capital Markets expertise
Ms. Alberti-Perez is an experienced
executive, public company director and former Chief Financial
Officer at technology and publishing companies. Prior to serving on
the Board of Directors of Digimarc Corp. (NASDAQ: DMRC) where she
is Audit Committee Chair, Milena was Chief Financial Officer of
Getty Images Holdings, Inc. (NYSE: GETY). Previously, Milena was
Chief Financial Officer of technology company MediaMath, Inc. and
the Global Chief Financial Officer of Penguin Random House LLC.
Todd Everett
- CEO experience
- Mailing, Shipping and Logistics experience
- M&A experience
- Previously offered a Pitney Bowes Board seat
Mr. Everett is the former CEO of
Newgistics, which he sold to Pitney Bowes in 2017. His
institutional knowledge and experience leading that business to
profitable growth would make him an invaluable addition to the
Board, particularly given current leadership’s inability to reverse
growing losses within the unit. Since leaving Pitney Bowes, Mr.
Everett has served as an Advisor and Board member at several
ecommerce and logistics companies.
Katie May
- CEO experience
- Board and Governance experience
- Mailing, Shipping and Logistics experience
Ms. May was CEO of ecommerce SaaS company
ShippingEasy.com prior to selling the business to Stamps.com. She
was then a director of Stamps.com and involved in its
value-maximizing sale to Thoma Bravo. Her background in leading
high-growth mailing, shipping and logistics businesses can help a
refreshed Board recruit new leaders, set appropriate KPIs and
incentives, and oversee strategic execution that drives enhanced
stockholder value.
Lance Rosenzweig
- CEO experience
- Board and Governance experience
- Technology and Ecommerce experience
Mr. Rosenzweig is a proven c-level leader
and public company director. He has been the Chief Executive
Officer of three public companies, including Support.com, which was
one of the best performing stocks in any exchange under his
leadership, and Startek, Inc. (NYSE: SRT), where he grew revenues
to $650 million and dramatically enhanced earnings. His background
in strategic planning, operations, technology and ecommerce makes
him an ideal addition to the Board, especially when considering
Pitney Bowes’ long term value destruction and inability to
profitably grow its segments.
Kurt Wolf
- Sizable Stockholder
- Board and Governance experience
- Strategic Planning and Capital Allocation experience
- Company Turnaround and CEO Transition experience
Mr. Wolf is the Managing Member and Chief
Investment Officer of Hestia Capital, the largest active
stockholder of Pitney Bowes. He has founded, or co-founded, three
successful start-ups and has over five years of turnaround and
strategy experience as a management consultant. He previously
served on two public boards, serving as an Audit and a Comp
Committee Chair. He was also on the GameStop Corp. (NYSE: GME)
Strategic Planning and Capital Allocation Committee, which led the
successful recapitalization of GameStop. His status as a sizable
stockholder would also result in important ownership perspectives
finally being considered in the boardroom.
About Hestia Capital
Hestia Capital is a long-term focused, deep value investment
firm that typically makes investments in a narrow selection of
companies facing company-specific, and/or industry, disruptions.
Hestia seeks to leverage its General Partner's expertise in
competitive strategy, operations and capital markets to identify
attractive situations within this universe of disrupted companies.
These companies are often misunderstood by the general investing
community or suffer from mismanagement, which we reasonably expect
to be corrected, and provide the 'price dislocations' which allows
Hestia to identify, and invest in, highly attractive risk/reward
investment opportunities.
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Hestia Capital Partners, LP (“Hestia Capital”), together with
the other participants named herein (collectively, “Hestia”), is
filing a preliminary proxy statement and accompanying WHITE
universal proxy card with the Securities and Exchange Commission
(“SEC”) to be used to solicit votes for the election of its slate
of highly-qualified director nominees at the 2023 annual meeting of
stockholders of Pitney Bowes Inc., a Delaware corporation (the
“Company”).
HESTIA STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ
THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH
PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB
SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS
PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT
WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES
SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.
The participants in the proxy solicitation are Hestia Capital,
Helios I, LP (“Helios”), Hestia Capital Partners GP, LLC (“Hestia
Partners GP”), Hestia Capital Management, LLC (“Hestia LLC”),
Kurtis J. Wolf, Milena Alberti-Perez, Todd A. Everett, Katie A. May
and Lance E. Rosenzweig.
As of the date hereof, the participants in the proxy
solicitation beneficially own in the aggregate 14,656,771 shares of
Common Stock, par value $1.00 per share, of the Company (the
“Common Stock”). As of the date hereof, Hestia Capital beneficially
owns 4,525,000 shares of Common Stock, including 100 shares held in
record name. As of the date hereof, Helios beneficially owns
9,430,000 shares of Common Stock. Hestia Partners GP, as the
general partner of each of Hestia Capital and Helios, may be deemed
to beneficially own the (i) 4,525,000 shares of Common Stock
beneficially owned by Hestia Capital and (ii) 9,430,000 shares of
Common Stock beneficially owned by Helios. Hestia LLC, as the
investment manager of each of Hestia Capital, Helios and certain
separately managed accounts (the “SMAs”), may be deemed to
beneficially own the (i) 4,525,000 shares of Common Stock
beneficially owned by Hestia Capital, (ii) 9,430,000 shares of
Common Stock beneficially owned by Helios and (iii) 678,500 shares
of Common Stock held in the SMAs. Mr. Wolf, as the Managing Member
of each of Hestia Partners GP and Hestia LLC, may be deemed to
beneficially own the (i) 4,525,000 shares of Common Stock
beneficially owned by Hestia Capital, (ii) 9,430,000 shares of
Common Stock beneficially owned by Helios and (iii) 678,500 shares
of Common Stock held in the SMAs. As of the date hereof, Ms.
Alberti-Perez beneficially owns 500 shares of Common Stock. As of
the date hereof, Mr. Everett beneficially owns 10,471 shares of
Common Stock As of the date hereof, Ms. May beneficially owns 2,300
shares of Common Stock. As of the date hereof, Mr. Rosenzweig
beneficially owns 10,000 shares of Common Stock.
1 Page 9 of Sachem Head LP’s 2022 proxy statement at U.S. Foods
Holding Corporation (link here).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230306005822/en/
Saratoga Proxy Consulting LLC John Ferguson / Joe Mills,
212-257-1311 jferguson@saratogaproxy.com /
jmills@saratogaproxy.com
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