Envestnet names three new directors, ends board fight with Impactive Capital
NEW YORK : Envestnet Inc. on Tuesday said it has added three new directors to end a board challenge from activist investment firm Impactive Capital that had been pushing the financial technology company to improve its performance by cutting costs.
Longtime banking executive Barbara Turner, veteran board member Wendy Lane and Lauren Taylor Wolfe, the co-founder of Impactive Capital, joined the board in the last days.
Envestnet, which provides technology and automation software for financial advisors and banks, also said it will suggest that all of its directors stand for election every year.
“These appointments were informed by Envestnet’s ongoing dialogue with shareholders as we continue to execute on our strategic plan to deliver enhanced value to shareholders,” James Fox, Envestnet board chairman, said in a statement.
Impactive, founded by veteran investors Taylor Wolfe and Christian Asmar, owns a 7.5 per cent stake in Envestnet and in January nominated four director candidates to the board.
The hedge fund, one of a small number of activist firms run by a woman and a minority, proposed adding Wolfe to Envestnet’s board last year in private discussions but was rebuffed.
Envestnet has seven board members but until reaching this agreement only three stood for re-election every year, putting the company, which has a market value of $3 billion, out of step with corporate America, where directors are generally voted on annually.
Impactive blamed poor profit margins and capital allocation for Envestnet’s underperformance and said its management and board directors were overpaid. It pushed the company to improve corporate governance by putting all directors up for election every year.
Its stock price has fallen 28 per cent in the last 52 weeks.
The settlement is one of a growing number of agreements between corporations and activist agitators this year, including Monday’s agreement between software company Salesforce and Elliott Management.