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Pitney Bowes chair steps down as firm girds for proxy fight

Parcel technology and shipping company Pitney Bowes Inc. (NYSE: PBI) announced late Thursday a major reshuffling of its board of directors, with a top retired UPS Inc. executive stepping in and three others choosing to retire.

Steve Brill, former president of UPS’ (NYSE: UPS) corporate strategy, and Darrell Thomas, former CFO at Harley-Davidson Inc. (NYSE: HOG) have been appointed to Pitney Bowes’ board. 

Brill spent 33 years at UPS in multiple roles and disciplines. He now serves in a consulting capacity with a focus on the rise of global e-commerce and cross-border operations.

At the same time, Pitney Bowes Chairman Michael Roth has stepped down as chairman, and director Robert Dutkowsky has been named non-executive chairman, effective immediately. Roth had little time left in the chairman’s role and chose to step down now rather than at the end of his term to give Dutkowsky an opportunity to start fresh.

The company also said board members S. Douglas Hutcheson and David Shedlarz will not stand for another term as directors.

Meanwhile, the Stamford, Connecticut-based company had some harsh words for Hestia Capital Management LLC, an investment firm that most recently reported an 8.4% stake in Pitney Bowes. 

In a letter published Thursday, Pitney Bowes said it has been engaged in “regular communication” with Hestia since 2021 about ways to enhance shareholder value. However, Pitney Bows said Hestia has constantly moved the goal posts regarding its views of the company and ways to resolve their disagreements.

The latest alleged change, according to Pitney, is that Hestia has insisted that CEO Marc Lautenbach step down. Hestia also has demanded Pitney accept the addition of three new independent directors and the departure of at least two incumbent directors. Lautenbach remains Pitney’s CEO.

Pitney said it wants to avoid a proxy fight with Hestia, though it now believes such a battle is its chosen outcome. Pitney said it has conceded board seats to Hestia’s nominees, including most recently Katie May, who ran e-commerce technology company before it was acquired by in 2016.

Mars, Pennsylvania-based Hestia’s objective is to take decent-sized positions in companies it believes to be misunderstood by investors. It’s not considered an activist investor. In a statement in late December, Hestia said it would disclose the identity of an interim CEO candidate, issue a 100-day transition plan and share a detailed value creation strategy before Pitney’s annual meeting in May.

Hestia may have a receptive audience. A dominant player in the decades when mailing and shipping scales and label printers ruled a world dominated by non-electronic mail, Pitney’s fortunes fell along with a secular decline in mail volumes. The company has shifted its value proposition to electronic parcel processing, but it has been challenged by internal missteps that have destroyed billions of dollars in shareholder value over the past 25 years.

Shares that traded in the mid-$60 a share range in 1998 today sit at about $4.57 a share. The latter figure is actually a near doubling from recent multidecade lows.

“We recognize that seeking a change in control of the board requires a compelling justification,” said Kurt Wolf, Hestia’s founder and chief investment officer, in December. “Unfortunately for stockholders, that justification lies in the fact that the board has failed to address a decade of dismal returns, driven by misguided strategy, failed execution and missed opportunities.”