Autodesk President and CEO Andrew Anagnost.
Autodesk
Starboard Value sues software maker Autodesk The company said Monday it would postpone its annual meeting, reopen the director nomination period and allow activist proxy fights.
Activists can typically launch a proxy contest, including nominating directors to replace the current board, only if they submit a proposal within a certain period of time. Starboard confirmed in a letter on Monday that it holds more than $500 million in Autodesk stock. Autodesk shares rose 6.5% following the disclosure.
Starboard alleges in its lawsuit that Autodesk delayed its annual report and knowingly waited until the proxy challenge deadline expired before disclosing to shareholders that it had launched an internal investigation into accounting fraud and financial misstatements as part of a “clear effort to thwart proxy challenges.”
“Manipulating corporate governance and disclosure requirements to give shareholders only one choice for directors effectively gives shareholders no choice at all,” Starboard said in its complaint filed in Delaware Chancery Court.
Autodesk began investigating fraud in early March over how it reported operating income and free cash flow. By March 8, Autodesk notified the SEC of the investigation. Regulatory filings show.
The company waited until April 1 to inform shareholders about the investigation. Documents to be submitted The show aired more than a week after the nomination period ended.
The investigation, released May 31 to coincide with the replacement of CFO Deborah Clifford, found that Autodesk executives made critical business decisions about how to bill customers and how to spend capital to improve free cash flow and operating margins.
“In a calculated scheme to avoid the possibility of their board position being challenged through a proxy contest, the incumbent directors failed to disclose these significant accounting misdirection and disclosure issues during the nomination period,” Starboard said in the complaint.
Shortly after the findings of its investigation were made public, Starboard began discussions with Autodesk’s board of directors about these matters and the company’s overall poor performance.
An Autodesk representative referred CNBC to the company’s previous statement on the matter, in which it said it was rejecting Starboard’s request to reopen the nomination period and postpone the annual meeting.
“Starboard is attempting to use its already completed internal investigation, which found no financial restatements, as a pretext for reopening the advance notice period,” the company said in a statement.
clock: CNBC interview with Autodesk CEO
