The move is the latest step in a proxy fight that Hestia, the third-largest shareholder in Pitney Bowes with an 8.4% stake, has launched at the company. Hestia says publicly traded Pitney Bowes’s profitability is being held back in part because of a strategic shift in recent years aimed at capturing more e-commerce business. 

Stamford, Conn.-based Pitney Bowes has been pushing back against the investor and telling shareholders it remains focused on its long-term strategy.  

“Our progress reflects the typical process of transforming a company in secular decline,” the company’s board wrote in a letter to shareholders March 27, adding that it is “confident that we will soon realize the benefits of our transformation and deliver significant value to you.”

Beyond pushing for a new CEO, Hestia is asking shareholders to add five new directors, including Mr. Rosenzweig, taking the board to nine members, at the board’s next meeting on May 9. The new directors would target a $15-plus stock price in the coming years, the investor said. Pitney Bowes’s stock price closed at $3.83 a share Tuesday, down about 27% from the year-ago level, according to data from FactSet.

Hestia was involved in efforts to turn around GameStop Corp. that led to a change in leadership at the videogame retailer in 2021, before the company’s shares went soaring as an internet sensation. The Adams Township, Pa.-based investor in December announced plans to overhaul the Pitney Bowes board and filed its definitive proxy statement March 16.

Pitney Bowes spokesperson Bill Hughes said the company doesn’t support the choice of Mr. Rosenzweig to become chief executive.

“The board does not believe that Lance Rosenzweig is qualified to serve as a director of Pitney Bowes, much less as CEO, based on his history of poor performance, weak corporate governance track record, as well as his lack of shipping and logistics experience,” Mr. Hughes said.

Mr. Rosenzweig most recently led Support.com Inc., a software company that was targeted by short sellers in 2021. He said in a letter to Pitney Bowes shareholders Tuesday that he delivered stockholder returns of more than 630% at that business during his tenure.

Pitney Bowes reported $3.5 billion in revenue in 2022, a 3.7% decline from the previous year, but swung to a net profit of $36.9 million compared with a net loss of $1.4 million in 2021.

Pitney Bowes, founded in 1920, has struggled in recent years as mail volumes have receded and more mail services have moved online, cutting into its core operations focused on postal business such as providing postage meters for bulk commercial mail users. 

Pitney Bowes made a bigger play for e-commerce business in 2017 when it acquired parcel-delivery company Newgistics Inc. for about $475 million. Since then it has focused on expanding that business, which takes packaged and labeled parcels from retailers and brands such as Vans, North Face and Nordstrom Inc., sorts them by destination and takes them to U.S. Postal Service stations for final delivery.

The company also has a mail sorting business that it says handled about 16 billion pieces of commercial mail for the USPS last year.

Pitney Bowes’s e-commerce unit reported revenue of $410 million in the fourth quarter of 2022, nearly half of the company’s overall revenue but down 13% from a year earlier, largely because of declining cross-border business. 

Hestia said in a March 16 letter to shareholders that it believes Pitney Bowes shouldn’t focus on expanding its global e-commerce division. It said the company is “trying to take on” shipping giants FedEx Corp. and United Parcel Service Inc. and is ill-equipped for such a competition.

Source: www.wsj.com