And That Proxy Fight Over a Seat on Blockbuster's Board Just Got a Little Bit Uglier
Look at it this way -- come June 24, when Blockbuster holds its annual shareholders meeting downtown, we'll be all done with this particular, and particularly ugly, chapter in the life of the "American icon." Till then, though, this latest development in Greg Meyer's attempt to snag a seat on the board.
Meyer -- the former managing director of rental-kiosking DVDXpress waging a proxy war with CEO Jim Keyes -- has filed yet another revised proxy statement with the Securities and Exchange Commission. And this time, he's going after current Blockbuster board member and former Electronics Data Systems vice chairman Gary J. Fernandes, who's also the longest-serving board member (he was elected in '03). It's precisely that tenure with which Meyer takes issue -- since, after all, the stock price has plunged from around $9 to a few pennies since Fernandes started serving, and he was among those who made the ill-fated decision to go after Circuit City in 2008. And, wonders Meyer in the part of the SEC filing that really rankles Blockbuster:
Is Mr. Fernandes Too Close to Blockbuster CEO Jim Keyes?
Mr. Fernandes served on the Board of 7-Eleven, Inc. during the entire time that Jim Keyes was CEO of that company from 2000 to 2005. Mr. Fernandes was a member of Blockbuster's Nominating Committee during the CEO search that resulted in Mr. Keyes being appointed CEO of Blockbuster in 2007. In total, Mr. Fernandes has served as a Board member of a company led by Jim Keyes for eight of the last ten years. Most recently, Mr. Fernandes was Chair of Blockbuster's Compensation Committee which, according to the Company's 2010 proxy statement, awarded Mr. Keyes 80% of his 2009 target bonusdespite financial results for the Company which substantially missed guidance and a stock price that was down nearly 50% for the year.
To which Blockbuster responds today with yet another smackdown celebrating Fernandes's tenure on the board while, at the same time, damning Meyer's proxy battle as "ill-conceived," for starters. Says Ed Bleier, chairman of the board's Nominating/Corporate Governance Committee:
"In his latest proxy filing, Meyer offers nothing constructive or helpful. He repeats his overly simplistic observations which only demonstrate a lack of understanding about the complex challenges Blockbuster faces. He has not offered any meaningful, concrete suggestions about what he would do differently if on the Blockbuster Board. Quite the opposite, his latest attack -- on Gary this time -- further convinces us that he would only serve as a disruptive force on the Board. His references to unproven allegations in prior lawsuits are reckless and irrelevant, and all claims against Gary and Jim Keyes in those lawsuits were ultimately dismissed."