Shareholders Urged to Vote FOR all of Pitney
Bowes’ Experienced and Qualified Directors and Katie May on the
GOLD Proxy Card
Pitney Bowes (NYSE:PBI), a global shipping and mailing company
that provides technology, logistics, and financial services, today
issued a letter to Pitney Bowes shareholders in connection with the
Company’s 2023 Annual Meeting of Shareholders (the “Annual
Meeting”) to be held on May 9, 2023. All Pitney Bowes shareholders
of record as of the close of business on March 10, 2023 will be
entitled to vote at the Annual Meeting.
For information about the Annual Meeting, please visit:
www.VoteforPitneyBowes.com
The full text of the letter follows.
Dear Fellow Shareholder,
Your vote at the upcoming Annual Meeting of Pitney Bowes on May
9, 2023 (the “Annual Meeting”) is more important than ever. We
urge you to support your Board by voting the GOLD proxy card today “FOR” all Pitney Bowes
nominees as well as Hestia nominee Katie May.
As you know, Hestia Capital (“Hestia”), is seeking to gain
control of the Board of Directors (the “Board”) and remove our
Chief Executive Officer (CEO) in an unnecessary proxy contest,
which jeopardizes our strategic progress over the past decade.
Hestia has made an ever-changing series of demands, failed to
articulate any coherent strategic thesis, and has yet to present a
replacement CEO candidate. Hestia’s entire conduct suggests that
the election of its slate would destabilize the Company, to the
detriment of our shareholders and the future of Pitney Bowes. In
its attempts to garner votes, Hestia has recently promoted a series
of misleading and inaccurate narratives regarding our Board,
management team, the strategic direction of our Company, as well as
their own slate of director nominees and their qualifications.
We encourage all shareholders to disregard
Hestia’s falsehoods and learn the actual facts from the
Company.
Our transformation roadmap: 2012 –
2023
At the time Marc Lautenbach was appointed CEO in December 2012,
Pitney Bowes had a portfolio of disjointed businesses in decline,
several of which were suffering from lack of investment in their
product lines. As a result, management focused its attention on
making the necessary divestments and investments to restructure and
simplify the portfolio and position the Company for sustainable,
long-term success.
Since then, our strategic actions have resulted in tangible
growth, which positions Pitney Bowes to create long-term
shareholder value and become a leader in the ‘ship and mail’
business. While this transformational process has taken longer than
expected, Pitney Bowes today has a coherent and synergistic
business portfolio centered on reducing the complexity of shipping
and mailing for our clients.
Our progress reflects the typical process of transforming a
company in secular decline: some early wins, a period of prolonged
investment, revenue growth, and the final stage we are
approaching—profitable revenue growth. We are confident that we
will soon realize the benefits of our transformation and deliver
significant value to you, our shareholders.
Pitney Bowes has outstanding corporate
governance practices and a strong, engaged, and diverse Board, with
a balanced mix of experience, skills, and leadership
expertise.
Approach to
Board Composition
- Board composition is reviewed regularly, with the goal of
aligning the skills and expertise of our directors with Pitney
Bowes’ long-term strategy.
- Regular cadence of independent review of our Board members by
outside advisors.
- The Board’s approach is to have a mix of shorter, medium, and
longer tenured directors.
- A robust director search process resulted in new directors with
highly relevant qualifications to increase shareholder value and
enhance the Board’s ability to oversee Pitney Bowes’ transition and
long-term strategy, including:
- portfolio simplification
- debt reduction
- development of GEC
Recent
Refreshments
- Elected Darrell Thomas and Steven D. Brill to the Board.
- Supporting the election of Hestia director nominee Katie May at
the Annual Meeting.
- Elected Robert M. Dutkowsky to succeed Michael I. Roth as
Non-Executive Chairman.
- Announced that Michael I. Roth, S. Douglas Hutcheson, and David
L. Shedlarz will not stand for re-election.
If our recommended director nominees
(including Katie May) are elected our Board will be 88.9%
independent and 66.7% diverse, with an average tenure of
approximately 5.3 years.
Pitney Bowes has a strong, engaged, and diverse Board, with a
balanced mix of relevant experience, skills, and leadership
expertise to enhance value for shareholders and execute the
Company’s strategy. We are committed to regular Board refreshment.
Assuming the election of Katie May, the Pitney Bowes Board will
have had six new independent directors join and eight members leave
our nine-member Board over the last five years, led by the
Governance Committee’s strategic focus on optimal Board composition
to support the Company’s strategic transformation.
By contrast, we believe Hestia’s nominees, with the exception of
Katie May, lack the necessary experience and skills to execute
Pitney Bowes’ strategy and enhance long-term value for
shareholders, and their election would be detrimental to the
success of the Company. Hestia claims to have put forth a slate of
nominees “who have relevant backgrounds for helping address Pitney
Bowes’ most pressing short- and long-term issues”. However, upon a
deeper review, the Board determined, and expect you will conclude,
that the experience that Hestia claims its nominees possess is
limited, superficial, and less relevant to our industry and public
companies than the Company’s directors.
Importantly, electing Hestia’s slate and removing the directors
it targets would destabilize the Board. The average tenure on the
Board would drop to 0.9 years, with only one director serving more
than three years and 7 of 9 directors joining in 2023. Such
inexperience at the Board level would be detrimental to the
execution of our strategy, as well as the value creation
opportunities we expect to realize following our Company’s
transformation.
Lastly, we have sought an amicable resolution with Hestia over
months of engagement, including by offering three new directors,
which we have effectively delivered through the appointments of
Darrell Thomas and Steven D. Brill, as well as the recommendation
of Katie May. Despite this, Hestia has continued to change its
demands erratically and has yet to fully articulate an actionable,
long-term strategy or plan for the Company. We firmly believe
ceding ANY further seats to
Hestia would not be in the best interest of the Company and our
shareholders. Unsurprisingly, notwithstanding its repeated promises
since December, Hestia has yet to present a replacement CEO
candidate, meaning shareholders are left to wonder who Hestia would
have lead the Company and execute the critical last phase of our
transformation to catalyze shareholder value.
Hestia misunderstands our business and has
promoted false narratives about our Board, management team, and
Company.
Hestia’s Inaccurate
Claims1
The FACTS
Overall Strategy
Over the past 10+ years, the Board and
management team have followed a misguided strategy.
- We’ve spent the last 10 years transforming a company by
divesting a set of businesses in secular decline and investing to
stabilize our core mailing businesses and create a growing shipping
business.
- This necessary transformation has positioned Pitney Bowes
for long-term growth and shareholder value creation.
Capital Allocation & Debt
The Board has failed to oversee management
and act as effective stewards of capital.
- We maintain an active and robust capital allocation strategy
by continuously reviewing the business portfolio and thoughtfully
managing our balance sheet, while making strategic divestitures,
investments, debt paydowns, and refinancings.
- Over the last ten years, we have
reduced debt by $1.7 billion, eliminated several hundred million
dollars of expenses, returned $1.5 billion in capital to
shareholders, invested $2.6 billion in our businesses, and divested
$2.1 billion of non-core, slower-growth businesses.
- The Company is now positioned for long term success, as
shown in revenue CAGR of -8.6% from 2007-2012, before Mr.
Lautenbach became CEO, to 4.9% from 2017-2022.
- Hestia is misleading shareholders by inaccurately stating
that Pitney Bowes “heads toward a debt cliff in the coming years”
when in fact we only have ~$240 million of debt maturities through
March 2026.
GEC Strategy
Hestia’s slate has a new strategic vision
and plan to address Pitney Bowes’ most critical issues, including
pivoting GEC’s strategy from one of “scale” to “niche”.
- Hestia’s consistently changing views on what to do with GEC,
from selling it, to deeming it a “valuable” asset, to shrinking it
reveal its lack of understanding of the business.
- Pitney Bowes acquired Newgistics to begin its creation of a
purpose-built, domestic middle market retail parcel delivery and
returns business, not a broad-based logistics business like FedEx
or UPS.
- Since the acquisition, Pitney Bowes has made the needed
technological and network investments so it can now offer national,
regional, or local delivery at competitive cost levels.
- The business is now positioned to achieve profitable revenue
growth through achievable volume increases.
- Hestia’s strategy is vague at best, with no path to
profitable growth. Shrinking the business to become “niche” may
have short term cost savings but will forgo the operating leverage
the Company has built.
UPS / FedEx
Management is trying to compete with FedEx
and UPS.
- We are not trying to become a UPS or FedEx as our targeted
strategy has enabled us to create a competitive product and scale
in the middle market retail segment.
- Hestia does not understand that we don’t compete alone
against UPS or FedEx. Instead, by working with the United States
Postal Service as our last mile delivery partner, we are able to
compete effectively against larger businesses within our targeted
market.
M&A
The Board and management failed to
aggressively pursue acquisitions, such as ShippingEasy.com and
Endicia, that were strategic fits and rather became a driving force
for competitors.
- This model has proven to be unsustainable, with the changes
in USPS’ approach to these markets, the value of these properties
has declined dramatically.
- Pitney Bowes has developed on its own a shipping user
interface called PitneyShip to provide multi-carrier shipping
capabilities to smaller entities.
- If Hestia understood the clients who use these shipping user
interfaces, they would know the number of packages they ship are
too small for them to become feeders into the domestic parcel
logistics business.
Shareholder Engagement
Pitney Bowes has not been responsive to
Hestia.
- Hestia’s claim of no responsiveness is simply false. We have
met with Hestia over 20 times and interviewed 4 director candidates
they proposed.
- Hestia was never serious about resolving this as their first
letter to our Board was sent with a leading shareholder-activist
law firm copied.
- Hestia has consistently declined to provide us with details
on their strategy or their underlying assumptions on their
numerical assertions.
- Hestia rejected every offer we put before them, including
one where we would elect three new directors (including two of
their proposed nominees).
- Hestia has not engaged in good faith and has instead made a
series of erratic pivots, which have derailed any constructive
discussions.
Executive Compensation
Mr. Lautenbach has received more than $66
million in compensation since 2012.
- Pitney Bowes applies rigorous compensation targets directly
linked to performance, with 90% of Mr. Lautenbach’s compensation at
risk based on company and/or stock performance, and the number
Hestia applied reflected “target” compensation, not compensation
actually received.
- The Board has consistently applied pre-established targets,
resulting in below-target awards when results dictated that
outcome.
- The majority of Mr. Lautenbach’s compensation is based on
long-term incentives.
- Mr. Lautenbach currently owns 2.9% of the Company. He has a
not sold a single, post-tax, share of the stock awarded him or any
of the approximately $1.35 million in stock he has acquired through
open market purchases.
VOTE THE GOLD
PROXY CARD TODAY
The Board of Directors of Pitney Bowes urges shareholders to
protect their investment and vote “FOR” all the nominees
recommended by the Pitney Bowes Board on the GOLD proxy card.
All Pitney Bowes shareholders of record as of the close of
business on March 10, 2023 will be entitled to vote at the Annual
Meeting. Please vote using one of the following methods:
Vote Online
Go to the website identified on the
enclosed GOLD proxy card or
voting instruction form.
Vote by Mail
If you received your Annual Meeting
material by mail, you also may choose to grant your proxy by
completing, signing, dating, and returning the enclosed
GOLD proxy card.
We encourage shareholders to disregard
any white proxy card sent to you by Hestia. Only the
latest dated proxy card will count at the Annual Meeting.
For more information, please visit the Pitney Bowes Annual
Meeting website at www.VoteforPitneyBowes.com. Shareholders who
have any questions or need assistance voting may contact the
Company’s proxy solicitor, Morrow Sodali LLC, toll-free at 1 (800)
662-5200.
Thank you for your continued support of Pitney Bowes.
Sincerely,
The Pitney Bowes Board of Directors
Advisors J.P. Morgan Securities LLC
is acting as financial advisor to Pitney Bowes. Sidley Austin LLP
and Cravath, Swaine & Moore LLP are serving as legal counsel to
Pitney Bowes.
About Pitney Bowes
Pitney Bowes (NYSE:PBI) is a global shipping and mailing company
that provides technology, logistics, and financial services to more
than 90 percent of the Fortune 500. Small business, retail,
enterprise, and government clients around the world rely on Pitney
Bowes to remove the complexity of sending mail and parcels. For the
latest news, corporate announcements and financial results visit
https://www.pitneybowes.com/us/newsroom.html. For additional
information visit Pitney Bowes at www.pitneybowes.com.
Forward-Looking Statements
This document contains “forward-looking statements” about the
Company’s expected or potential future business and financial
performance. Forward-looking statements include, but are not
limited to, statements about future revenue and earnings guidance
and future events or conditions. Forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties that could cause actual results to differ materially
from those projected. In particular, we continue to navigate the
impacts of the Covid-19 pandemic (Covid-19) as well as the risk of
a global recession, and the effects that they may have on our and
our clients’ business. Other factors which could cause future
financial performance to differ materially from expectations, and
which may also be exacerbated by Covid-19 or the risk of a global
recession or a negative change in the economy, include, without
limitation, declining physical mail volumes; changes in postal
regulations or the operations and financial health of posts in the
U.S. or other major markets or changes to the broader postal or
shipping markets; the loss of, or significant changes to, United
States Postal Service (USPS) commercial programs, or our
contractual relationships with the USPS or USPS’s performance under
those contracts; our ability to continue to grow and manage
volumes, gain additional economies of scale and improve
profitability within our Global Ecommerce segment; changes in labor
and transportation availability and costs; and other factors as
more fully outlined in the Company’s 2022 Form 10-K Annual Report
and other reports filed with the Securities and Exchange Commission
(the “SEC”). Pitney Bowes assumes no obligation to update any
forward-looking statements contained in this document as a result
of new information, events or developments.
Important Additional Information and Where
to Find It
Pitney Bowes has filed a definitive proxy statement (the “Proxy
Statement”) and other documents with the SEC in connection with its
solicitation of proxies from shareholders in respect of the Annual
Meeting. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS, INCLUDING PITNEY
BOWES’ PROXY STATEMENT AND ANY AMENDMENTS AND SUPPLEMENTS THERETO
AND THE ACCOMPANYING GOLD PROXY CARD, FILED WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY CONTAIN, OR WILL CONTAIN, IMPORTANT
INFORMATION ABOUT PITNEY BOWES. Shareholders may obtain free copies
of the Proxy Statement and other relevant documents that Pitney
Bowes files with the SEC and on Pitney Bowes’ website at
www.pitneybowes.com or from the SEC’s website at www.sec.gov.
_____________________________ 1 Unless stated otherwise, quotes
from Hestia are from the March 16 letter, Hestia’s definitive proxy
statement, filed on March 16, 2023, or the presentation Hestia
released on January 23, 2023.
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version on businesswire.com: https://www.businesswire.com/news/home/20230326005070/en/
Editorial - Bill Hughes Chief Communications Officer
203.351.6785
Financial - Ned Zachar, CFA VP, Investor Relations
203.614.1092
Alex Brown Senior Manager, Investor Relations 203.351.7639
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