AOL Wards Off Challenge From Starboard, Maintains Board Seats
AOL CEO Tim Armstrong persuaded shareholders to reject an activist investor's bid to shake up the board, overcoming one of his toughest challenges since taking charge of the internet company.
AOL's slate of board nominees -- Mr. Armstrong, Richard Dalzell, Karen Dykstra, Alberto Ibarguen, Susan Lyne, Patricia Mitchell, Fredric Reynolds and James Stengel -- won support from investors at the company's annual meeting in Boston, the company said in a statement today. The vote count is preliminary.
Activist investor Starboard Value -- an investment firm run by Jeffrey C. Smith that is AOL's fifth-largest shareholder, with 5.3% of outstanding shares -- fought to install three directors, saying the directors supported a failing strategy.
Mr. Armstrong's case was bolstered by a rising stock price this year, and the vote may give him more leeway as he tries to transform the once-dominant Web-service provider into a digital media company driven by advertising.
Mr. Armstrong has made bets on content, including the purchase of the Huffington Post for $315 million last year, and he's spending as much as $300 million investing in Patch -- the "hyper-local" news service that Mr. Armstrong co-founded and sold to AOL.
"The company is re-engergized and refocused, and we have one of the best brands in the internet space," Mr. Armstrong told shareholders at the meeting. "We are going to grow the brand back to where it should be."
-- Bloomberg News --