Autodesk President and CEO Andrew Anagnost.
Autodesk
Starboard Value sues software maker Autodesk Postponing the company’s annual meeting on Monday, reopening the window for board nominations and allowing activists to launch a proxy fight.
Activists typically can only launch a proxy fight, which involves nominating a slate of directors to replace the existing board, if they submit a proposal within a certain deadline. Starboard confirmed in a letter on Monday that it owns a stake in Autodesk worth more than $500 million. After the news was disclosed, Autodesk’s stock price rose 6.5%.
Starboard said in the lawsuit that Autodesk “in an apparent effort to prevent a proxy challenge,” intentionally waited until the window closed to disclose to shareholders that it would delay the release of its annual report and launch an internal investigation into accounting irregularities and financial misstatements.
Starboard said in the complaint filed in the Delaware Chancery Court that it “manipulates corporate governance and disclosure obligations to allow shareholders to choose only one type of director, effectively leaving them with no choice at all.”
In early March, Autodesk began investigating irregularities in its reporting of operating margin and free cash flow. As of March 8, Autodesk has notified the SEC of the investigation. Supervision filing exhibit.
The company did not notify shareholders of the investigation until April 1. Filing The show comes just over a week after the nomination window closed.
The investigation found that Autodesk executives made major business decisions around how to bill customers and how to spend money to boost its free cash flow and operating margins. The findings were announced on May 31, along with the replacement of Treasurer Deborah Clifford.
Starboard said in the lawsuit: “In an elaborate scheme, the current directors failed to disclose these serious issues regarding accounting misconceptions and disclosure issues during the nomination window to avoid infringement of their board positions through a proxy fight. any potential challenges.
Shortly after the findings were announced, Starboard began discussing these issues and the broader business underperformance with Autodesk’s board of directors.
An Autodesk representative referred CNBC to its previous statement on the matter, which said it would deny Starboard’s request to reopen the nomination window and postpone the annual meeting.
“Starboard is seeking to use a now-completed internal investigation, which did not result in a financial restatement, as an excuse to reopen the advance notice period,” the company said in a statement.
watch: CNBC Interview with Autodesk CEO
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