Starboard Urges Autodesk to Hold CEO Accountable After Probe
(Bloomberg) -- Starboard Value LP urged Autodesk Inc.’s board to evaluate whether Chief Executive Officer Andrew Anagnost is the right person to lead the company following recent accounting issues.
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“There is an urgent need for significant change at the company,” the activist investor said Thursday in a statement.
An Autodesk spokesperson said the company “is fully committed to transparency and focused on creating long-term shareholder value as we execute on our strategy, which is driving strong momentum in our business.” Management and the board have met with Starboard multiple times, Autodesk has said.
Accounting problems at Autodesk first came to light in April, when the company delayed its annual financial disclosures and said it was opening a review of processes related to free cash flow and operating margins. In May, the company announced it was replacing Debbie Clifford as chief financial officer.
Bloomberg reported last week that documents showed the software company ignored internal warnings about the use of a controversial sales strategy that was central to the accounting probe’s findings.
“The recent reporting further confirms that senior executives relied on business practices that were not in Autodesk’s best interests and carried significant risks and did so in an attempt to manipulate results in order to meet financial targets,” Starboard said in its statement, citing Bloomberg’s story. “We urge the board to hold management accountable for its actions.”
Starboard disclosed a stake in the California-based software maker in June and has since criticized the company’s disclosure practices. The shareholder also has called for board changes and improvement in operations.
Anagnost has been CEO since 2017, when he was appointed following a settlement with activist investors Sachem Head Capital Management and Eminence Capital. The sales practices under scrutiny were made aware to some senior executives, including Chief Operating Officer Steve Blum, who approved some of the transactions, documents show.
The shares were little changed at $252.06 at 11:40 a.m. Thursday in New York. The stock had gained 3.5% this year through Wednesday’s close, including 12% since Starboard’s stake was disclosed.
Autodesk is scheduled to report earnings on Aug. 29, with Wall Street expecting revenue to have increased 10% to $1.48 billion. The company makes industrial design and operation software, serving customers in construction and manufacturing.
(Updates with comment from company in the third paragraph. An earlier version of this story corrected a comment from Starboard.)
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