Office Depot, Inc. is responding to a move by its largest shareholder to change how it is conducting a CEO search. Yesterday, Starboard Value LP together with its affiliates, which characterized as the largest shareholder of Office Depot with approximately 14.6% of its outstanding common stock, announced today that it had issued an open letter to Office Depot shareholders recommending that they vote for board change at the retailer’s annual meeting on August 21.
Starboard said it had received support from independent proxy voting advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co., LLC.
In response, Office Depot announced that if CEO Selection Committee members Tom Colligan and Marsha Evans are re-elected, the company would immediately invite to the board any of the three Starboard nominees recommended by ISS and Glass Lewis who are not elected. The company stated that it believes its recommended course will best assure an uninterrupted CEO search process.
Additionally, the company noted, the Office Depot board will increase its size, as required, immediately following the annual shareholders meeting to accommodate the additional director nominees recommended by the advisory firms.
“We have listened carefully to Office Depot shareholders and understand that they are supportive of adding new perspectives to the noard,” said Neil Austrian, Office Depot Chairman and CEO. “At the same time, shareholders are also telling us that they do not want this election to impede the progress made by the CEO Selection Committee, which includes director nominees Marsha Evans and Tom Colligan. We believe that maintaining the integrity of the Selection Committee and the progress they have made are of paramount importance.”