Peter Kafka

Recent Posts by Peter Kafka

ISS Gives Starboard the Nod for Two Board Seats in AOL Proxy Fight

A minor victory for the dissident investors waging a proxy fight against AOL: Institutional Shareholder Services is recommending that investors vote for two of Starboard Value LP’s three board nominees.

The shareholder advisory service gave the nod to Starboard CEO Jeff Smith and Dennis Miller, a former partner at Spark Capital. ISS noted that Miller seems less committed to the idea that AOL needs to abandon Patch, AOL CEO Tim Armstrong’s expensive local-news bet.

In a press release, AOL claimed its own victory, noting that ISS didn’t back all three of Starboard’s nominees. “We believe that ISS’s recommendation to dismiss Starboard’s full slate is further evidence that Starboard’s nominees are unqualified to lead AOL.” (Correction: An earlier version of this story incorrectly reported that Starboard had nominated eight board members.)

And it didn’t have anything nice to say about Smith and Miller: “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.”

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work