Envestnet names three new directors, ends board fight with Impactive Capital
28/03/2023 14:24
By Svea Herbst-Bayliss
NEW YORK, March 28 (Reuters) - Envestnet Inc. ENV.N on
Tuesday said it has added three new directors to end a board
challenge from activist investment firm Impactive Capital that
had been pushing the financial technology company to improve its
performance by cutting costs.
Longtime banking executive Barbara Turner, veteran board
member Wendy Lane and Lauren Taylor Wolfe, the co-founder of
Impactive Capital, joined the board in the last days.
Envestnet, which provides technology and automation software
for financial advisors and banks, also said it will suggest that
all of its directors stand for election every year.
"These appointments were informed by Envestnet's ongoing
dialogue with shareholders as we continue to execute on our
strategic plan to deliver enhanced value to shareholders," James
Fox, Envestnet board chairman, said in a statement.
Impactive, founded by veteran investors Taylor Wolfe and
Christian Asmar, owns a 7.5% stake in Envestnet and in January
nominated four director candidates to the board.
The hedge fund, one of a small number of activist firms run
by a woman and a minority, proposed adding Wolfe to Envestnet's
board last year in private discussions but was rebuffed.
Envestnet has seven board members but until reaching this
agreement only three stood for re-election every year, putting
the company, which has a market value of $3 billion, out of step
with corporate America, where directors are generally voted on
annually.
Impactive blamed poor profit margins and capital allocation
for Envestnet's underperformance and said its management and
board directors were overpaid. It pushed the company to improve
corporate governance by putting all directors up for election
every year.
Its stock price has fallen 28% in the last 52 weeks.
The settlement is one of a growing number of agreements
between corporations and activist agitators this year, including
Monday's agreement between software company Salesforce and
Elliott Management.
(Reporting by Svea Herbst-Bayliss; Editing by Mark Porter)
((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))