An investment firm looking to make major changes at parcel technology and shipping company Pitney Bowes Inc. (NYSE: PBI) called Thursday for the ouster of longtime CEO Marc F. Lautenbach and non-executive Chairman Robert Dutkowsky, who two weeks ago was named to the role following the departure of then-Chairman Michael Roth.
Hestia Capital Partners, which controls an 8.4% equity stake in Stamford, Connecticut-based Pitney Bowes, did not identify whom it has tapped as interim CEO. It plans to install five new board members to fill out the company’s nine-member board. Pitney Bowes did not issue a response at press time.
In a letter to shareholders that accompanied a formal proxy statement, Hestia disclosed portions of a 100-day turnaround plan. It includes evaluating the strategy and execution of what Hestia’s said is Pitney Bowes’ poorly managed global e-commerce business, and forming a strategic planning and capital allocation committee, composed of a slate of new directors, to analyze all phases of the company’s business. The two sides are expected to go head-to-head at Pitney Bowes’ annual shareholder meeting in May.
The company’s new board would oversee a change in its global e-commerce (GEC) business to one of niche from one of scale, Hestia said. Right now, it competes with bigger, deeper-pocketed players where it doesn’t stand a chance, according to Hestia. The GEC business should only compete against parcel-shipping heavyweights in markets where Pitney Bowes has specific advantages that offset its disadvantages in scale, Hestia said.
Another needed strategy is a full-blown attack on corporate costs, which management has not addressed publicly for years and which is a “shocking reality” given long-declining profits, Hestia said.
Pitney Bowes has seen its fortunes decline along with a secular decline in mail volumes. The company has in recent years shifted its value proposition to electronic parcel processing. However, it hasn’t been enough to destroy about a quarter-century in shareholder value.
Hestia saved its sharpest attacks for Lautenbach. In more than 10 years at the helm, Lautenbach has overseen a share price decline of 50% and a six-time credit rating downgrade despite the tremendous potential of Pitney Bowes’ business, Hestia said.
Earlier this month, the board named two executives to its board, including Steve Brill, former president of UPS Inc.’s corporate strategy. It also announced the retirement of three members, including Roth. At the same time, Pitney Bowes attacked Hestia for shifting the goal posts on the demands it is making from the company.
In the last hour of trading, Pitney Bowes stock was trading unchanged at $3.75 per share.