(Reuters) - EBay Inc (EBAY.O) on Monday rejected activist investor Carl Icahn's two nominees to its board, saying both were unqualified, and urged shareholders to vote against them at its next annual meeting.
Icahn, who owns just over 2 percent of the e-commerce company, has been pressuring eBay for weeks to spin off its PayPal payments business. He has also repeatedly accused eBay of poor corporate governance.
The billionaire nominated Icahn Enterprises LP (IEP.O) employees Daniel Ninivaggi and Jonathan Christodoro, both of whom Icahn regularly nominates to boards.
The chairman of eBay's corporate governance and nominating committee, Richard Schlosberg III, said the board considered both but rejected them because "neither nominee has relevant experience or expertise."
EBay said since each Icahn nominee currently sits on four public company boards, they are not in compliance with eBay's guidelines on "overboarding."
EBay founder and Chairman Pierre Omidyar in a statement urged shareholders to support the company's slate, which includes Chief Executive John Donahoe.
The company also said Donahoe's 2013 compensation fell by more than half to $13.8 million. That largely reflects the board's decision in 2012 to give him a one-time award of $14.8 million in performance share units, although eBay's weaker-than-expected financial performance also hurt his pay.
The company did not in its preliminary proxy statement set the date for its next annual shareholders meeting, which is expected to take place in the spring.
Icahn has sparred with eBay management via open letters and press releases since January, when the pugnacious billionaire made an unsolicited proposal for eBay to hive off PayPal.
The company has repeatedly said PayPal and eBay are better off as part of the same company.
In a fresh missive on Monday, Icahn accused Donahoe of "inexcusable incompetence" and said the fast-growing PayPal could "wither" if it remains part of eBay.
"PayPal may well go the way of other former technology greats such as Blackberry, Dell, Eastman Kodak, Polaroid, Nintendo, Xerox, Sony, Palm, and AOL," Icahn said.
EBay called Icahn's comments "false and misleading."
"In pursuit of his own profit motives, Carl Icahn has made another unsubstantiated attack on John," eBay said.
EBay shares fell 1.4 percent to $58.22 on the Nasdaq.
(Additional reporting by Deepa Seetharaman in San Francisco; Editing by Richard Chang) nL2N0M7100
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