AOL, Inc. (AOL) Pleased with ISS Rejection of Starboard Nominees; Issues Statement
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AOL, Inc. (NYSE: AOL) today issued the following statement in response to a report issued by Institutional Shareholder Services Inc. (“ISS”) regarding the Company’s Annual Meeting of Stockholders to be held on June 14, 2012.
“While we are pleased that ISS has rejected Starboard’s full slate of nominees and has recommended that stockholders vote FOR six of AOL’s highly qualified and experienced director nominees, we strongly believe that ISS reached the wrong conclusion in failing to recommend that AOL stockholders vote FOR all eight of the Company’s highly qualified director nominees. AOL’s Board of Directors has a proven track record of taking meaningful action to drive shareholder value. We believe AOL has the right strategy and team to successfully execute its plan.
We believe that ISS’s recommendation to dismiss Starboard’s full slate is further evidence that Starboard’s nominees are unqualified to lead AOL. Moreover, we believe that by declining to recommend all of Starboard nominees a seat on the AOL Board, ISS acknowledges that Starboard was seeking a disproportionate number of nominees. Importantly, it is our firm belief that, if elected, Jeffrey Smith and Dennis Miller would dismantle the strategy that is producing strong returns for shareholders. AOL’s eight nominees are uniquely and diversely qualified and have significant operational, financial and public Board experience in AOL’s areas of strategic focus. We believe Mr. Smith and Mr. Miller do not add any unique skills or experience the Board does not already have.
AOL’s Board is comprised of the right team of leaders who have overseen an approximate 40% increase in share price over the past 12 months and an approximate 165% increase since the stock’s low in August 2011, including a recent 52-week high. AOL has reported three consecutive quarters of better than expected earnings results and has significant momentum, and we believe ISS has recommended directors that will severely impair that momentum. In just two and a half years since spinning off from Time Warner, we believe AOL has made significant operating and financial progress and has positioned the Company to deliver long-term value to stockholders. Furthermore, the Board is committed to enhancing long-term value and has already taken substantial steps to advance this goal, including committing to bring Patch to run-rate profitability by the end of 2013, returning all of the proceeds of the approximately $1 billion patent transaction to our stockholders and engaging in a thorough process with our shareholders to select two new independent Board members. AOL has a clear, concise and publicly communicated growth strategy, and we believe we are on track to meet our strategic goals.
In contrast, we do not believe that Mr. Smith or Mr. Miller have demonstrated a basic understanding of AOL’s business model, nor do we believe that they have a viable plan for AOL other than to break up and liquidate the Company. We believe that by recommending Starboard’s nominees, ISS is supporting a short-term strategy that limits our stockholders’ ability to realize the significant long-term benefits inherent in the Board’s plan.
Although ISS’s recommendation reiterates our belief that Starboard’s full slate of nominees would decrease the Board’s level of industry expertise, public company experience and diversity, we believe ISS’s report disregards the significant progress AOL has made over the past two and a half years and advocates halting AOL’s successful turnaround before it is complete. ISS’s logic is flawed in our view and if its approach were to be applied to other companies in similar turnaround situations, investors would never have received the remarkable stockholder gains at many prominent companies, including Apple, Caterpillar and IBM during the 1990’s, among many other examples.
In contrast to ISS’s flawed report, Egan-Jones Proxy Services, a leading independent proxy advisory firm, supports the election of ALL of the Company’s director nominees. In its May 29, 2012 report, Egan-Jones stated that:
‘…the dissidents have not presented a convincing plan of action that persuades us that their nominees’ inclusion on the board would maximize stockholder value;’
and
‘we are not convinced that the dissidents’ nominees would work to the benefit of the stockholders given their level of industry expertise and public company experience.’
We strongly urge stockholders to follow the recommendation of Egan-Jones and to maximize the full value of their investment by supporting the AOL Board’s vision for long-term success and by voting FOR all of AOL’s director nominees on the WHITE proxy card today.”
Every vote is extremely important. AOL recommends that stockholders vote FOR all of AOL’s director nominees by Internet, by telephone or by signing and dating the WHITE proxy card itself and returning it as soon as possible.
“While we are pleased that ISS has rejected Starboard’s full slate of nominees and has recommended that stockholders vote FOR six of AOL’s highly qualified and experienced director nominees, we strongly believe that ISS reached the wrong conclusion in failing to recommend that AOL stockholders vote FOR all eight of the Company’s highly qualified director nominees. AOL’s Board of Directors has a proven track record of taking meaningful action to drive shareholder value. We believe AOL has the right strategy and team to successfully execute its plan.
We believe that ISS’s recommendation to dismiss Starboard’s full slate is further evidence that Starboard’s nominees are unqualified to lead AOL. Moreover, we believe that by declining to recommend all of Starboard nominees a seat on the AOL Board, ISS acknowledges that Starboard was seeking a disproportionate number of nominees. Importantly, it is our firm belief that, if elected, Jeffrey Smith and Dennis Miller would dismantle the strategy that is producing strong returns for shareholders. AOL’s eight nominees are uniquely and diversely qualified and have significant operational, financial and public Board experience in AOL’s areas of strategic focus. We believe Mr. Smith and Mr. Miller do not add any unique skills or experience the Board does not already have.
AOL’s Board is comprised of the right team of leaders who have overseen an approximate 40% increase in share price over the past 12 months and an approximate 165% increase since the stock’s low in August 2011, including a recent 52-week high. AOL has reported three consecutive quarters of better than expected earnings results and has significant momentum, and we believe ISS has recommended directors that will severely impair that momentum. In just two and a half years since spinning off from Time Warner, we believe AOL has made significant operating and financial progress and has positioned the Company to deliver long-term value to stockholders. Furthermore, the Board is committed to enhancing long-term value and has already taken substantial steps to advance this goal, including committing to bring Patch to run-rate profitability by the end of 2013, returning all of the proceeds of the approximately $1 billion patent transaction to our stockholders and engaging in a thorough process with our shareholders to select two new independent Board members. AOL has a clear, concise and publicly communicated growth strategy, and we believe we are on track to meet our strategic goals.
In contrast, we do not believe that Mr. Smith or Mr. Miller have demonstrated a basic understanding of AOL’s business model, nor do we believe that they have a viable plan for AOL other than to break up and liquidate the Company. We believe that by recommending Starboard’s nominees, ISS is supporting a short-term strategy that limits our stockholders’ ability to realize the significant long-term benefits inherent in the Board’s plan.
Although ISS’s recommendation reiterates our belief that Starboard’s full slate of nominees would decrease the Board’s level of industry expertise, public company experience and diversity, we believe ISS’s report disregards the significant progress AOL has made over the past two and a half years and advocates halting AOL’s successful turnaround before it is complete. ISS’s logic is flawed in our view and if its approach were to be applied to other companies in similar turnaround situations, investors would never have received the remarkable stockholder gains at many prominent companies, including Apple, Caterpillar and IBM during the 1990’s, among many other examples.
In contrast to ISS’s flawed report, Egan-Jones Proxy Services, a leading independent proxy advisory firm, supports the election of ALL of the Company’s director nominees. In its May 29, 2012 report, Egan-Jones stated that:
‘…the dissidents have not presented a convincing plan of action that persuades us that their nominees’ inclusion on the board would maximize stockholder value;’
and
‘we are not convinced that the dissidents’ nominees would work to the benefit of the stockholders given their level of industry expertise and public company experience.’
We strongly urge stockholders to follow the recommendation of Egan-Jones and to maximize the full value of their investment by supporting the AOL Board’s vision for long-term success and by voting FOR all of AOL’s director nominees on the WHITE proxy card today.”
Every vote is extremely important. AOL recommends that stockholders vote FOR all of AOL’s director nominees by Internet, by telephone or by signing and dating the WHITE proxy card itself and returning it as soon as possible.
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