Yes. But only if they OUST the Board of Directors.
Here, this should help you:
April 28, 1997 1:15 PM ET
Investors to Schmidt: Dump
Novell's Board
By Steve Hamm, ZDNN
Using the Web as a bully pulpit, a group of disgruntled Novell Inc. shareholders has called for the
ouster of the company's board of directors. That doesn't seem likely, but the group's call to action has
already accomplished at least one thing: It got the attention of Novell's brand-new chairman and CEO,
Eric Schmidt.
Late last week, Schmidt responded by E-mail to a message from the ad hoc group - agreeing with
some of its criticisms of Novell's past performance but unwilling to comment on its calls for the
replacement of all directors with the exception of Schmidt himself. He agreed that the networking
software company's marketing approach has been weak and promised to do something about it. In a
face-to-face interview Sunday, Schmidt said, "Yes, Novell has a messaging problem. It's not known for
what it does. It's known for its history."
The dissident group, which calls itself the Novell Investors' Coalition, took shape in February after one
individual shareholder, Joe Antol of Woodbridge, N.J., began posting criticisms of Novell's board on
his personal Web site (www.monmouth.com/~jantol). Later he took his campaign to forums on the
Silicon Investor site (www.techstocks.com) - urging other fed-up Novell investors to send proxy
statements voting against the directors to the California Public Employees Retirement System and the
State of Wisconsin Investment Board, both of which have sizable Novell stakes. Novell's annual
meeting is scheduled for May 2, and several board members are up for re-election. "We want these
directors ousted," Antol said in an interview Friday. "They've wasted enough time and enough of our
money."
Neither of the retirement funds has taken up the fight - at least not yet. Antol called CalPERS a "paper
tiger." HeHe claims that about 300 to 400 individual Novell investors have pledged their approximately
500,000 shares to CalPERS, if it stages a proxy fight to unseat the Novell directors at the annual
meeting. But those votes alone won't be nearly enough to get the job done. Novell has about 344
million shares outstanding. CalPERS officials weren't available for comment over the weekend.
In addition to Schmidt, who reported for work as chairman and CEO April 7, most of Novell's
directors date from the regime of former chairman Ray Noorda, who retired more than two years ago.
They include
Elaine Bond, a consultant for The Chase Manhattan Bank; Hans-Werner Hector, co-founder of SAP
AG; Jack Messman, CEO of Union Pacific Resources Co.; Larry Sonsini, a partner in the law firm of
Wilson,
Sonsini, Goodrich & Rosati; Ian Wilson, managing partner of Dartford Partnership; and Vice Chairman
John Young, former CEO of Hewlett Packard Co.
For Antol, this fight is personal. He holds the directors responsible for the decline in the value of his
12,000 Novell shares, most of which he bought in late 1995 for $18 a pop. Novell shares were trading
at just $7 a share on Friday. The company turned in disappointing first-quarter earnings of $50.8 million
on revenues of $374.8 million - down precipitously from $437.9 million, in revenues a year earlier.
And, last week, Novell warned that its second-quarter earnings will come in lower than analysts
expected. That sent its stock price reeling again.
And that was a fresh injury to Antol and his allies - who had sent a letter April 18 to Novell detailing
their criticisms of the company and its board. They accused the board of being too passive and of
lacking experience in the software field. And they said Novell's
marketing has been too weak in the face of an onslaught from competitor Microsoft Corp. Paul
Fiondella, an East Hampton, N.Y., investor who is part of the group, said Sunday, "This board is
clueless about what this technology is all about." Fiondella, who
formerly ran a small PC software company, Softel, said he's impressed with Schmidt's credentials as a
manager and chief technology officer at Sun Microsystems Inc. But he said he's concerned that Schmidt
won't be able to make changes because of intransigence by the board and incumbent Novell managers.
"He can't turn the organization on a dime
like [Sun CEO Scott] McNealy can," Fiondella said.
In fact, Schmidt isn't even trying to. He said during the interview Sunday that he's in the middle of
assessing the company's technology, products and management structure. He plans a series of detailed
reviews in May. He would not talk about the future of the board of
directors. He expects investors to ask pointed questions at the annual meeting on Friday. But he doesn't
feel defensive. "I'm the new guy. I can't change history," he said. "I can only go forward."
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Your gonna have to draw your own conclusions on this.
Joe...
PS: Hi Mark! <g> |
