Starboard revives proxy fight with CEO Smith's nomination to Autodesk board

By Arsheeya Bajwa

(Reuters) - Starboard Value on Wednesday nominated three director candidates, including its chief executive and founder, Jeff Smith, to Autodesk's 13-member board, rekindling its proxy battle with the engineering and design software maker over margin growth.

The hedge fund nominated Geoff Ribar, former CFO of Cadence Design Systems, and Christie Simons, a senior partner at Deloitte & Touche in addition to Smith. 

Ribar serves on the board of Acacia Research, a company backed by Starboard, while Simons joined memory chipmaker Micron's board this month.

The hedge fund, which holds a $500 million stake in Autodesk, last week announced plans to nominate a minority slate of director candidates for election at the 2025 annual meeting, nearly a year after a failed attempt to push its board candidates.

In the fourth quarter, Starboard cut its Autodesk investment by roughly 44%, according to a regulatory filing.

"Board change is necessary at Autodesk," Starboard said last week. 

Starboard has argued that Autodesk spends more than its software peers and has underperformed the market.

Autodesk, valued at about $58 billion, has seen its shares fall over 7% this year, a deeper slump than the S&P 500's 1.8% drop. Shares closed off 0.68% on Wednesday at $271.21.

The company said its strategy is working and it added two independent board members.

It also said it will interview the hedge fund's candidates. "Although we have concerns regarding Starboard's nomination approach and its selection of candidates, consisting of a Starboard principal and affiliates and friends who are closely aligned with its opportunistic interests, we remain open to meeting its nominees," the company said in a statement.

Some investors welcomed Starboard's proxy fight, forecasting it may speed up savings and boost the share price.

"For investors, this represents a potential value-creation moment where the nomination could trigger accelerated cost management, enhanced accountability, increased focus on AI and cloud technologies, and more disciplined capital allocation," said Michael Ashley Schulman, chief investment officer at Running Point Capital. 

Last year, Starboard urged Autodesk's board to explore a CEO change and cost cuts, after it lost a legal fight against the company to delay its annual meeting and reopen the window for director nomination, failing to appoint its candidates due to missed deadlines.

Autodesk last week said it had offered the hedge fund a chance to participate in the process of finding the new directors that were added in December 2024.   

The company in December appointed two independent directors — former chairman and CEO of Kraft Foods John Cahill, and Ram Krishnan, chief operating officer of Emerson — to its board.  

Former Intel executive Stacy Smith currently serves as the 13-member board's non-executive chairman and is also on the boards of chipmakers Kioxia and Intel.

(Reporting by Arsheeya Bajwa in Bengaluru and Svea Herbst-Bayliss; Editing by Shinjini Ganguli, Alan Barona and David Gregorio)