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Starboard Revives Proxy Fight with CEO Smith’s Nomination to Autodesk Board

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Starboard Value has renewed its proxy fight with Autodesk by nominating three director candidates, including its founder and CEO Jeff Smith, to the engineering and design software company’s board. The hedge fund, which holds a $500 million stake in Autodesk, aims to address concerns about the company’s margin growth and overall performance.

Nominations and Proxy Battle

In addition to Jeff Smith, Starboard has nominated Geoff Ribar, former CFO of Cadence Design Systems, and Christie Simons, a senior partner at Deloitte & Touche, to Autodesk’s 13-member board. Ribar also serves on the board of Acacia Research, a Starboard-backed company, while Simons recently joined Micron’s board.

The move comes nearly a year after a failed attempt by Starboard to push its own slate of director candidates. The hedge fund has criticized Autodesk for overspending compared to its software peers and for underperforming the market, pointing out that Autodesk’s shares have fallen over 7% this year, compared to a modest 1.8% drop in the S&P 500.

Autodesk’s Response and Future Plans

Autodesk has stated that its strategy is working and pointed to the addition of two independent board members in December 2024. The company expressed openness to meeting with Starboard’s nominees but raised concerns about the selection of candidates, questioning their alignment with Starboard’s opportunistic interests.

Starboard’s push for change is seen by some investors as a potential catalyst for increased cost management, enhanced accountability, and a greater focus on AI and cloud technologies, which could create value and improve Autodesk’s financial outlook.

Autodesk has already offered the hedge fund a chance to participate in the process that led to the appointment of the two new directors, including former Kraft Foods CEO John Cahill and Emerson’s COO Ram Krishnan.

Deliveroo Delays Margin Growth Goal Amid Slow Consumer Recovery

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Deliveroo has postponed its margin growth target after a slower-than-expected recovery in consumer confidence, causing a drop in shares that erased the gains made over the past year. Despite reporting its first statutory profit and positive cash flow, the meal delivery company revised its forecast for margin expansion.

For the year, Deliveroo posted a profit of £2.9 million ($3.8 million), a turnaround from a loss of £31.8 million in 2023. Its core earnings reached the top end of guidance, amounting to £129.6 million. However, CEO Will Shu admitted that the consumer environment had not recovered as quickly as expected. In 2023, Shu had set a target to achieve a 4% core earnings margin by 2026, with the possibility of further upside. But now, Deliveroo expects margin growth to pick up starting in 2026, with the 4% target set for the medium term.

“The consumer market since our capital markets event hasn’t been the smoothest,” Shu noted, reflecting the ongoing challenges. As a result, shares in Deliveroo fell 9%, wiping out the gains made over the past year. Jefferies analysts called the new timeline a “blemish,” though they pointed out that the consensus forecast had already been lagging behind the original timeline.

Despite the setback in margin growth, Deliveroo saw growth in gross transaction value (GTV), a key performance metric, which picked up in the second half of 2024. Order growth in the UK and Ireland, Deliveroo’s largest market, also accelerated each quarter. For Q1 2025, Shu expressed confidence, stating that trading had been strong, with no significant changes compared to the latter half of 2024.

To continue growing, Deliveroo will focus on value, its tiered membership programs, and other operational efficiencies. The company also announced its exit from Hong Kong, selling some of its assets to Delivery Hero’s foodpanda after nine years of operations in the region. Shu explained that Hong Kong’s market was particularly price-sensitive, which influenced the decision to exit. This departure will leave Deliveroo operating in seven international markets, in addition to its presence in Britain and Ireland.