Activist Elliott gets two seats on the EMC board
Budge up, and welcome their 'added depth and insights'
EMC - currently under attack by activist investor Elliott Management, which is wanting it to sell off VMware - has granted Elliott two board seats.
The EMC board has been expanded from 11 to 13 seats to make room for the two, Jose Almedia (chairman, president and CEO of global healthcare company Covidien), and Donald Carty (chairman of Virgin America Airlines, a director of Canadian National Railway Company, and Talisman Energy).
Paul Singer's Elliott Management worked collaboratively with EMC to identify and review candidates for the two new board seats.
Jesse Cohn, portfolio manager at Elliott Management, stated that "both Joe and Don are strong and experienced executives, and we believe they will bring invaluable perspectives to the board’s ongoing review of EMC’s strategic direction".
Joe Tucci, EMC chairman and CEO, said the two newbies “will bring added depth and insights to our board".
Elliott has agreed to certain limited standstill and voting provisions through September 2015, including voting in favour of EMC’s proposed slate of directors at the 2015 Annual Meeting of Shareholders.
Tucci has said there is too much competition between EMC’s three main subsidiaries, EMC II, Pivotal and VMware and said this will be addressed. Whether this will involve EMC selling off all or part of the 80 per cent of VMware it owns is (a) unknown and (b) the big question.
Stifel Nicolaus MD Aaron Rakers suggests EMC could re-organise into three new business units: core technology (VMAX, VN, etc), emerging technology (ScaleIO, DSSD, ViPR etc), and a new cloud division.
Tucci’s retirement should take place by the end of February. The date for the EMC shareholders’ meeting is not available. It was 14 April last year.
We’re expecting EMC’s future organisational strategy to be clear by the time Joe goes off into the sunset. ®