Starboard Value LP is heating up its activism efforts at Box Inc., announcing Monday that it has nominated four director candidates to the software company’s board of directors.
Starboard criticized recent actions from Box
in a press release announcing the nominations, with Managing Member Peter Feld arguing that “not enough progress has been made to put Box on a better path” to address the “years of missed expectations, poor results, and generally poor governance” that prompted Starboard to originally invest in the company back in 2019.
“While last year we were pleased to reach agreement on the appointment of two new independent director candidates, it is now clear that those appointments have not created enough change,” Feld said in Starboard’s release. Starboard owns an approximately 8.0% stake in Box.
Box shares are up 0.8% in Monday morning trading.
The move sparked a response from Box, which defended its positioning and board expertise in its own release.
“Box is in the strongest financial position of its history,” the company said, calling out its efforts to deliver “profitable growth” with 11% revenue growth and a $127 million increase in free-cash flow in fiscal 2021.
Box argued that its board of directors is “composed of independent, diverse and highly experienced directors, all of whom have served in C-suite positions at multibillion-dollar publicly traded software, technology, or financial services companies,” and that Dana Evan, Peter Leav and Chief Executive Aaron Levie, whose terms are up for reelection at the next annual meeting “have the superior skill sets required to support the company’s profitable growth plan.”
Evan is the former chief financial officer of VeriSign, while Leav is the CEO of McAfee.
Starboard is nominating Deborah Conrad, a former chief marketing officer for Intel Corp.; John McCormack, a former chief executive of Websense; Xavier Williams, the chief executive of American Virtual Cloud Technologies; and Feld, the Starboard managing member.
Box shares have gained 5% over the past two years as the S&P 500
has risen 47%.