Activist investor Starboard Value LP announced it has nominated two directors for election to CarMax Inc.'s (NYSE: KMX) board at the company's 2026 annual meeting of shareholders. The firm delivered a letter to CarMax's incoming CEO Keith Barr outlining its views on the used car retailer's operations.

Starboard nominated William C. Cobb and Jeffrey C. Smith for board positions. Cobb serves as CEO of Frontdoor Inc. and previously led H&R Block Inc. from 2011 to 2017. Smith is managing member, CEO and chief investment officer of Starboard Value LP.

The investment firm holds approximately 6.6 million CarMax shares as of March 10, according to regulatory filings. This includes positions held through various Starboard entities and forward purchase contracts exercisable within 60 days.

In its letter, Starboard cited what it called "fixable execution gaps" at CarMax and identified potential improvements in digital execution, reconditioning processes and pricing strategies. The firm also called for expanded cost reduction programs in selling, general and administrative expenses.

Starboard described CarMax's omnichannel business model as structurally superior but said current performance does not reflect this advantage. The firm views the appointment of new CEO Barr as an opportunity to address operational issues.

CarMax has not immediately responded to Starboard's director nominations or the contents of the activist investor's letter. Starboard intends to file preliminary proxy materials with the Securities and Exchange Commission to solicit shareholder votes for its director candidates.