Hestia Capital Management, the third largest stockholder of Pitney Bowes, has nominated seven candidates for election to the company’s nine-member board of directors.
The election will be held at the company’s 2023 annual meeting of stockholders. Hestia has also released a presentation that details a sampling of current leadership’s failings that have led to significant stockholder value destruction.
Kurt Wolf, founder and chief investment officer of Hestia, commented, “We recognize that seeking a change in control of the board requires a compelling justification. Unfortunately for stockholders, that justification lies in the fact that the board has failed to address a decade of dismal returns, driven by misguided strategy, failed execution and missed opportunities. As we detail in our accompanying presentation, the long tenures of chairman Michael Roth and CEO Marc Lautenbach have been defined by poor capital allocation and acquisitions that we believe Mr Lautenbach has completely mismanaged. The combination of a poor strategy and failed execution has led to a significant decline in the company’s stock price and a continual decline in its credit ratings. Notably, an investor would have been 6.8x better off had they invested in the S&P 500, rather than in Pitney Bowes during Mr Lautenbach’s tenure. This number increases to a staggering 21.6x during Mr Roth’s tenure. This number ranges from 1.7x to 23x for the other seven directors. This record of failure is all the more egregious considering Pitney Bowes’ incredibly attractive competitive position and high-value products and services.
“Looking ahead, Pitney Bowes should not initiate an insular and reactionary board refresh or employ scorched earth tactics to try to deprive stockholders of their right to vote for new leaders at the annual meeting. In addition to our valid concerns about management, we believe stockholders are poorly served by the board’s numerous interlocks to the Interpublic Group of Companies (which Mr Roth led for years), stale composition and insufficient sector expertise. If the board were to take note that the company’s stock price is up more than 20% since our investment was publicly disclosed and roughly 13% since the day we announced our intent to nominate a majority slate of director candidates, it should realize that stockholders strongly support Hestia’s efforts. We intend to do everything in our power to continue advancing stockholders’ best interests, regardless of the resources and time required to do so.”