The role of activist investors in technology firms has again been thrust into the spotlight after campaigns led to the removal of the CEOs at Commvault and Xerox.
On publishing its financial results, Commvault released a statement telling of a "strategic transformation initiative", which will see Bob Hammer step aside following "dialogue" Elliott Management, which holds around 10 per cent of Commvault's shares through various funds.
The Commvault news was followed by an announcement from Xerox, revealing that chief exec Jeff Jacobson will depart the vendor after reaching an agreement with investors Carl Icahn and Darwin Deason.
These announcements might seem amicable, but they are the result of very public agendas pursued by investors looking to overhaul the companies from the top down.
The episodes are the latest in a saga that has seen activist investors terrorise tech firms including Dell, VMware, Riverbed and Citrix over recent years.
Heading for the exit
The temperature was turned up on Commvault and Hammer at the start of April when serial tech investor Elliott Management took a stake in the back-up vendor, before sending a 16-page passive-aggressive letter to the Commvault board. The letter expressed Elliott's "admiration" of the CEO, but also its desire to completely overhaul the vendor's management and strategy.
"While we reiterate our respect for what Bob and Al [Bunte, COO] have accomplished over the years, we emphasise that now is the time for the board to take significant action," Elliott stated, before recommending four directors for appointment to the board.
"We believe Commvault's issues are widespread, including its severe margin underperformance, suboptimal financial targets, recurring execution issues and lagging corporate governance," the firm added.
Fast forward one month and Commvault has now announced the end of Hammer's 20-year tenure at the vendor and the search for a new CEO.
On his departure Hammer said: "As we are unveiling new strategic initiatives intended to drive Commvault's next phase of growth, I believe now is the right time to begin the transition to our next generation of leadership.
"Our dialogue with Elliott showed that we are closely aligned on many matters, and we are pleased to be moving in a direction that we believe will enable us to deliver increased value creation for our shareholders and customers alike."
In the case of Xerox, Jacobson's departure was finally confirmed after a long campaign mounted by notorious investor Carl Icahn and Darwin Deason (who between them own 15 per cent of Xerox), in an attempt to block a deal that would see Xerox merge with Fujifilm.
Xerox's board encouraged shareholders to ignore Icahn's advances and approval the deal with Fujifilm, but today announced that Jacobson, along with six board members, would leave the board and be replaced by two Icahn nominees in John Visentin and Keith Cozza (who is CEO of Icahn Enterprises). The new appointments leave the merger that Icahn had opposed in jeopardy.
Jacobson's departure was buried in a release titled "Xerox reaches agreement with Carl Icahn and Darwin Deason", and no comment from the former CEO was offered.
The situations at Xerox and Commvault are a stark reminder of how shareholders with a relatively small stake in an organisation can rally to overthrow the leadership.
Icahn has a track record for making this type of move and was behind a failed attempt to block Michael Dell from taking his eponymous vendor private in 2013.
The serial investor tried to pinch the vendor from under Dell's nose by making a competing offer, accusing the founder of having an "abysmal record".
Icahn conceded defeat on that occasion, but is rumoured to be meddling in Dell's affairs again, after reportedly taking a medium-sized stake in VMware, according to CNBC.
The rumour, announced in the middle of April, came to light after VMware parent Dell Technologies said it was considering a reverse merger that would see Dell become part of VMware.
Other recent attempts from activist investors have proved more successful.
In 2014 Riverbed was forced to sanction its own sale after a sustained attack by Elliott Management, which was then the vendor's largest shareholder. Elliott didn't end up acquiring Riverbed (Thoma Bravo was the suitor in a $3.6bn deal), but it would have seen a healthy return after selling its stake.
In the following year Elliott set its sights on Citrix, forcing out then-CEO Mark Templeton and eventually achieving its aim of spinning of Citrix's GoTo business.
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