Proxy Firms Urge Intel Shareholders to Vote No on eBay's Donahoe -- Update

By Don Clark And Joann S. Lublin 

Two influential proxy advisory firms have urged Intel Corp. shareholders to vote against the re-election of director John Donahoe, eBay Inc.'s president and chief executive, citing what they characterized as a poor attendance record.

Institutional Shareholder Services and Glass, Lewis & Co. criticized Mr. Donahoe for attending less than 75% of the meetings held by the Intel board and committees he serves on in 2014.

"We view this as a failure by this director to fulfill a fundamental responsibility to represent shareholders at such meetings," Glass Lewis wrote to its clients in preparation for the Intel annual shareholders meeting scheduled for May 21.

ISS wrote that Mr. Donahoe lacked "a valid excuse" for his attendance record. Both firms recommended re-election of all other Intel directors.

A spokesman for Mr. Donahoe referred to a letter sent Thursday to shareholders by Andy Bryant, Intel's chairman, and Susan Decker, its lead independent director. The letter urged shareholders to vote for Mr. Donahoe, attributing his attendance recorded to unusual demands from his work at eBay last year.

The e-commerce company, which faced pressure from activist Carl Icahn, decided to spin off its PayPal unit as a separate public company.

"2014 was an extraordinary year for Mr. Donahoe," the Intel letter said, stating that his time was constrained because of the special circumstance of the breakup plan.

The letter added that before 2014, Mr. Donahoe had a strong attendance record, and that his attendance in 2015 had already rebounded.

In urging shareholders to re-elect Mr. Donahoe, Intel cited the value of his expertise, particularly to the company's leadership team, which is relatively new. Brian Krzanich was named CEO in May 2013.

"During his board service, Mr. Donahoe has provided guidance to our management team on technology and innovation, and has provided important insights on Intel's global online presence and the online experiences of our customers, which are critical aspects of Intel's strategy for creating long-term stockholder value," the Intel letter continued. "Mr. Donahoe also brings vital technical and brand marketing expertise, as well as over 15 years of senior leadership experience, to our board."

ISS and Glass Lewis are the two biggest U.S. proxy advisory firms. It isn't unusual for them to urge the defeat of board members if their attendance slips without what they view as valid reasons.

Mr. Donahoe is continuing in the role of eBay CEO until the completion of its breakup later this year. He is expected to serve as PayPal's chairman thereafter.

Write to Don Clark at [e-mail] and Joann S. Lublin at [e-mail]

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