eBay Responds to Icahn's Attack on Board Noting Superior Leadership

On Monday, Carl Icahn issued an open letter to

shareholders questioning the company's board composition noting "the complete disregard for accountability at eBay is the most blatant we have ever seen." eBay responded to Icahn's three main concerns noting the "extraordinary insight" by the board.

Icahn noted that a proxy vote should not be needed to change the board as certain members should resign immediately, "either out of pure decency or sheer embarrassment at the public exposure of the extent of their self-serving activities." He specified that Marc Andreessen purchased "large" stakes in two former eBay subsidiaries and that Scott Cook retained $1 billion of Intuit stock (the direct competitor of PayPal). In addition, Icahn called out the CEO, John Donahue for "feeding information to competitors on the eBay Board and selling the company's assets to board members." Carl Icahn addressed five main points in his letter. The author wrote, "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?"

Shortly after the release, eBay issued a response noting that "Marc Andreessen and Scott Cook bring extraordinary insight, expertise and leadership to eBay's board, which is scrupulous in its governance practices and fully transparent with regard to its directors' other affiliations and businesses. And eBay Inc. President and CEO John Donahoe is widely respected for his turnaround of eBay and leadership of the company over the past six years." eBay commented that Marc Andreessen's "track record of creating value and driving innovation makes him an extraordinary asset on eBay's board. The response added that Mr. Andreessen was recused from all decision making regarding Skype as he holds a small stake in the acquiring group, as the Board has rules to "minimize the impact of any such conflicts." In regards to Scott Cook, eBay noted Cook's "exceptional track record of creating value and driving innovation." The letter continued, "The overlap between Intuit and eBay is small, fully disclosed and within the SEC safe harbor for interlocking directorates. Regarding hiring, this is old news, any restrictions ended years ago, and Intuit historically had not been a source of talent for eBay Inc." Shares of eBay closed at $54.59 on Friday. eBay is currently trading up 3.19% at $56.33.