Investor Carl Icahn now holds 17% of eBay’s stock, and is protesting to fellow stockholders about what he feels is unethical and harmful activity by three members of the eBay board.
One of them is Netscape founder Marc Andreessen, who Icahn alleges took advantage of his insider knowledge as an eBay board member to reap billions of dollars in deals with former eBay subsididiaries Skype and Kynetic.
Icahn concludes his open letter with a call to separate eBay and its subsidiary, PayPal, into independent companies, saying the division would benefit both firms.
Dear Fellow eBay Stockholders,
We have recently accumulated a significant position in eBay’s common stock because we believe there is great long-term value in the business. However, after diligently researching this company we have discovered multiple lapses in corporate governance. These include certain material conflicts of interest, which we believe could put the future of our company in peril. We have found ourselves in many troubling situations over the years, but the complete disregard for accountability at eBay is the most blatant we have ever seen. Indeed, for the first time in our long history, we have encountered a situation where we believe we should not even have to run a proxy fight to change the board composition. Rather, we believe that in any sane business environment these directors would simply resign immediately from the eBay Board, either out of pure decency or sheer embarrassment at the public exposure of the extent of their self-serving activities.
How is it possible for the current board to engage in any meaningful discussions about long-term stockholder value while: (1) at least two board members are directly competing with eBay, (2) one board member is demanding eBay cease hiring the most talented employees, (3) another board member is routinely funding competitors while buying companies from eBay and reaping significant personal riches, (4) at least two board members appear to have put their own financial gain in ongoing conflict with their fiduciary responsibilities to stockholders and (5) the CEO seems to be completely asleep or, even worse, either naive or willfully blind to these grave lapses of accountability and stockholder value destruction?
More details at Forbes forbes.com