June 8, 2020 / 3:12 PM / 25 days ago

Commvault settles with Starboard, adds 3 newcomers to board

(Reuters) - Data management software maker Commvault Systems Inc said on Monday it reached an agreement with Starboard Value that brings three newcomers onto the board and ends a two-month long proxy contest with the activist hedge fund.

Starboard, which owns a 9.3% stake, had nominated six directors, including its founder, Jeffrey Smith, to join Commvault’s 11-member board.

Todd Bradley, who had been nominated by Starboard, Allison Pickens and Arlen Shenkman are now directors while Alan Bunte, Frank Fanzilli and Daniel Pulver will leave the board, the company said.

Shenkman will lead a newly created three-person Operating Committee that will be involved in overseeing the company’s financial health by reviewing budgeting, helping establish margin targets and reviewing capital allocation policy.

“The expertise provided by these new directors and the focus of the Board’s Operating Committee will help improve Commvault’s profitable growth, return on investment, and enhance value creation,” Smith said in a statement.

For Starboard this marks the third time in two months that it won board seats after shareholders elected its eight nominees to the board at GCP Applied Technologies and the hedge fund settled for seats at Merit Medical Systems, both in May.

Starboard, which often pushes for operational changes and says it has the appropriate director nominees to help a company perform better, stands out among other corporate activists for winning board seats. In the first five months of 2020, it had won 14 seats.

For Commvault this was the second time it faced in activist in recent years. In 2018, Elliott Management, one of the world’s biggest and most powerful activists, and Commvault reached an agreement to add two independent directors suggested by Elliott.

Commvault then got a new CEO in 2019 when Sanjay Mirchandani replaced Robert Hammer, who stepped down.

Reporting by Svea Herbst-Bayliss and Munsif Vengattil; Editing by Steve Orlofsky

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