Symantec Declares Truce With Starboard, Names Three New Directors
Symantec has reached an agreement with activist investor Starboard Value and has named the three new independent members that will join its board of directors.
The three new directors all come from the five-person slate of candidates New York-based Starboard proposed nominating to Mountain View, Calif.-based Symantec's board last month, and include a Starboard managing member, a former McAfee interim CEO, and a board member of IT distributor Arrow Electronics.
In addition, a fourth new independent director mutually agreeable to both Starboard and Symantec will be added following Symantec's 2018 annual shareholder meeting later this year. These four new directors will replace two existing Symantec board members, one of whom is retiring in accordance with corporate governance guidelines while the other opted not to stand for re-election.
In exchange, Starboard has agreed to withdraw its full five-person slate of candidates and vote all its shares in favor of the mutually agreed-upon nominees. Starboard said in an Aug. 16 filing with the U.S. Securities and Exchange Commission (SEC) that it believes shares of Symantec were undervalued at the time of purchase, and that it hopes to change the makeup of Symantec's board to unlock more value.
"We are aligned with management in our belief that there are significant opportunities to continue to drive improved financial results, including enhanced operating margins and growth," Peter Feld, managing member of Starboard Value, said in a statement.
Symantec's stock was up 0.51 percent to $19.90 in after-hours trading Monday. Nonetheless, Symantec's stock has lost 31.1 percent of its value since the start of 2018 alone.
Feld and McAfee veteran Dale Fuller will join the Symantec board immediately, while Arrow Electronics board member Rick Hill will join the board following Symantec's 2018 annual shareholder meeting. If Starboard's stake in Symantec dips from its current 5.8 percent to less than 3 percent, Feld or the subsequent Starboard employee director would immediately resign from the board.
Feld has been the head of research and managing member of Starboard Value since 2011, when he co-founded the hedge fund. Fuller was interim president and CEO of McAfee from October 2006 to April 2007, and served on the board of cybersecurity vendor AVG from November 2008 to October 2016.
Hill, meanwhile, spent nearly two decades as CEO of semiconductor manufacturer Novellus Systems, and has served as chairman of Starboard-owned semiconductor producer Marvell Technology Group since May 2016. He has also been a board member at Arrow since 2006.
"[We] were pleased that Starboard offered a number of talented candidates to ensure that Symantec maintained a strong and engaged board," Symantec Board Chairman Dan Schulman said in a statement. "Our new directors have financial and business acumen, public company board experience and technology sector expertise that complement our Board's skills and expertise."
Two of the candidates from Starboard's August slate of nominees were not named to Symantec's board. They are: Nora Denzel, who spent nearly five years as SVP of big data, social product design and marketing at financial software company Intuit; and Michael Strachan, who has served as a board member and audit committee chairman of Starboard-owned Marvell since May 2016.
The size of Symantec's board of directors will increase from 11 to 13 as the new arrivals will replace only Steve Miller, who's leaving in accordance with the existing director retirement policy, and Gerry Laybourne, who won't stand for re-election.
Miller has been on Symantec's board since 1994 and serves as the president and CEO of the International Automobile Component (IAC) group, while Laybourne has been on Symantec's board since 2008 and has served as board chairman of kids technology company Katapult Studio since May 2013.
"On behalf of the entire board, we would like to express our gratitude to Steve and Gerry for their distinguished service and contributions to Symantec, including guiding the advising the company as it has evolved and grown over the years," Schulman said.