A public brawl over eBay's business strategy intensified on Thursday, as the company's chairman lashed out at Carl Icahn, rebutting claims made by the billionaire activist about its corporate governance.
In the wake of Icahn releasing two pointed public letters that questioned eBay's refusal to spin off PayPal from its primary online auction business, eBay chairman Pierre Omidyar accused the activist of "making unsubstantiated claims about our company—and deliberately impugning the integrity of our directors."
Icahn claims that two board members, Marc Andreessen and Scott Cook, have irreconcilable conflicts of interest that make them unsuitable to sit on eBay's board. However, Omidyar backed both men, calling Icahn's claims "false and misleading."
Here is the text the of Omidyar's letter:
I am eBay Inc.'s founder, board chairman and largest shareholder.
A new eBay shareholder, Carl Icahn, is making unsubstantiated claims about our company — and deliberately impugning the integrity of our directors.
After acquiring a stake in our company, Mr. Icahn asked a good question: should PayPal continue to be part of eBay? This is not a new idea. It is a question our board has asked ourselves as we periodically evaluate strategic options for the company.
Our board is deeply committed to doing what's in the best interests of shareholders. After diligent consideration, we believe that PayPal and eBay are better together. In the future, if we determine that's no longer true, we will act accordingly and in the best interests of shareholders and the company.
Instead of having an honest discussion about a reasonable question, Mr. Icahn has chosen to attack the integrity of two highly respected and qualified board members, Scott Cook and Marc Andreessen. He also has attacked the integrity of our CEO John Donahoe.
Mr. Icahn's attacks are false and misleading.
I want to be clear about the facts:
We have a world-class board. Scott and Marc are world-class directors with impeccable credentials. They have my full support. Our company and our shareholders benefit greatly from having Scott's and Marc's insight, experience and leadership on our board.
John Donahoe has my full support, and the strong support of our board. Over the last six years, John has led our company through a significant turnaround – a job many people thought was impossible. In the process, he has driven PayPal's growth and brought a renewed focus on innovation across the company.
The company has fully addressed other false claims made by Mr. Icahn. The facts can be found here and here.
Let me underscore a few points:
Throughout the board's process of divesting Skype, Marc Andreessen recused himself from all deliberations on the transaction, including all discussions, negotiations, and decisions. eBay and its shareholders benefitted from the divestiture of Skype and its ultimate sale to Microsoft. The transactions were widely seen as a superb outcome for the company.
Subsequent to the Skype transaction, Marc was re-elected to our board in 2012 with virtually unanimous support (99.7% of votes) of our shareholders. Like all of our directors, Marc serves at the pleasure of our shareholders, and our shareholders have spoken.
Mr. Icahn also makes unfounded claims about Andreessen Horowitz and its investment in Fanatics, a business formerly owned by GSI Commerce, which was acquired by eBay. Mr. Icahn's claims are wrong. Andreessen Horowitz made its investment in Fanatics more than a year after eBay divested it. There was absolutely no connection between the two events.
Mr. Icahn's claims about Scott Cook also are unfounded. As founder of Intuit and chairman of the company's executive committee, Scott has an exceptional track record of creating value and driving innovation. He has been an enormous asset to eBay's board for many years. The overlap between Intuit and eBay is small for both companies. Regarding hiring, any restrictions ended years ago.
These are the facts. That's what shareholders deserve to know.
eBay Inc. Founder and Chairman of the Board