Proxy advisory firm Institutional Shareholder Services (ISS) is recommending that Box stockholders support two of management’s director candidates in its ongoing board fight with activist Starboard Value, the company says.
According to a company statement and people familiar with the situation, ISS recommended shareholders vote on the management proxy card for incumbent directors Peter Leave and Aaron Levie, and withhold votes for incumbent director Dana Evan at the September 9 annual meeting.
Levie is also founder and chief executive of the data storage company. Starboard has indicated it would seek to reinstate Levie to the board in the event he lost his seat at the upcoming vote. Confirmation of the recommendation was not available as of publication.
Starboard, with an 8.6% stake, is seeking three board seats, including one for its managing member Peter Feld. The activist gained two board seats in 2020 as part of a settlement, but claims additional representation is needed due to continued financial underperformance and management’s disregard for minority shareholder rights.
But in its recommendation, ISS stated that “since the 2020 settlement with the dissident and the formation of the operating committee, the company appears to have made significant progress on the margin side over the past several quarters,” according to Box.
It noted that eight of the 10 directors are now independent, as is the chairperson.
“Given the level of collaboration in the initial stages of the dissident’s involvement, it is unclear what incremental benefit the dissident’s presence on the board would impart at this stage,” ISS added.
Box shares closed at $25.21 per share Monday, up 1.25%.