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NEW YORK (Reuters) -Four large investors in Pitney Bowes (NYSE:PBI) told Reuters they will vote for Hestia Capital’s director candidates as the activist fund campaigns to oust the shipping and mailing company’s long-time chief executive and overhaul its business strategy.
Hestia, which owns an 8.4% stake in Pitney Bowes, has nominated five director candidates including its chief investment officer Kurt Wolf. The company’s board will have nine members after the annual meeting on May 9.
Park Circle Investors, Anqua Management, DOMO Capital Management and the family office of former Third Point executive Bradley Radoff said they will back Hestia’s nominees, signaling growing frustration with the way the company has been managed.
“Pitney Bowes is really messed up,” said Jeff Legum, who runs Park Circle Investors and owns 2.8 million shares. “The CEO needs to go because he is a hindrance to moving ahead,” said Legum, who purchased his stake in early 2023 because he expects the stock price to climb if the company is managed better.
Half a dozen investors have now publicly criticized Pitney Bowes for what they called the company’s poor execution in the ecommerce segment, excessive debt, overly high corporate costs and the chief executive officer’s more than $66 million in pay.
Marc Lautenbach has been chief executive since 2012.
The company said Hestia’s demands are not consistent with the interests of shareholders and said it has positioned itself for long-term profitable growth over the last decade.
“Hestia’s campaign continues to be built on flawed assumptions, a poor understanding of our businesses, and ever-changing and contradictory proposals,” Pitney Bowes spokesperson Bill Hughes said. “On the other hand, we have been more than responsive to Hestia’s request for board refreshment,” he said.
Earlier this month the company appointed former Harley Davidson Treasurer Darrell Thomas and former UPS President Steve Brill to its board. The company also urged investors to elect Katie May, a former CEO of ShippingEasy.com and former board member of Stamps (NASDAQ:STMP).com, who was nominated by Hestia.
A representative for Hestia did not respond to requests for comment.
Hestia wants a new board to explore alternative strategies for the company’s global ecommerce segment and focus on cash-generating segments like Presort Services, its mail aggregation business, and SendTech Solutions, its postage meter business.
Jamie Zimmerman, who runs Anqua Management’s Litespeed Master Fund, said the company has opportunities to make money.
There is “unrealized value here, not just in the underperforming Global E-commerce segment but also in the original SendTech business where opportunities have been underexploited for some time,” she said. Her firm will vote for Hestia’s nominees.
Pitney Bowes, which leases postal meters and pre-sorts mail for commercial clients, has seen its share price drop 30% over the past 12 months and 65% over the past five years. Headquartered in Stamford, Connecticut, it is valued at $654 million, down from its peak of $2 billion when Lautenbach joined.
“The incumbents have blamed everyone and everything other than themselves and have offered no plan or path to value creation,” said Radoff. “I believe enough is enough and significant change is warranted.”
