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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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik