WASHINGTON — An influential shareholder advisory group has dealt corporate raider Carl Icahn a setback in his quest to take over three Blockbuster board seats.
Meanwhile, Blockbuster CEO-chairman John Antioco appears to be feeling some heat over his pay package.
As a result, both sides have retreated a bit from their previous hard-line rhetoric with a week to go before the decisive stockholders’ meeting.
In a regulatory filing Tuesday, Icahn promised to “cooperate with management” in setting company strategy if elected to the board. He also said he would support Antioco’s reinstatement as chairman of the board should Antioco lose his seat as a result of Icahn’s challenge.
“I look forward to working together with Mr. Antioco to enhance stockholder value,” Icahn said in the filing.
The apparent olive branch represents a change in tone from the blistering attacks on Antioco’s pay package and management abilities launched in previous filings with the Securities and Exchange Commission.
Icahn’s shift may have been prompted by a partial rebuff from Institutional Shareholder Services, a leading adviser to shareholders on corporate governance issues and proxy voting.
In a proxy analysis sent to clients Tuesday, ISS recommended shareholders vote in favor of two members of Icahn’s dissident slate of directors, Strauss Zelnick and Edward Bleier, but not for Icahn himself, calling him a potentially “disruptive” force on the board.
In his SEC filing, Icahn urged shareholders to “follow ISS’s recommendation” to vote for Zelnick and Bleier but said he was “disappointed that ISS recommended that stockholders withhold voting for my personal candidacy.”
For his part, Antioco has recently appeared to be backing away from an earlier vow to step down from his role as CEO of Blockbuster and leave the company should he not be re-elected to the board.
In a statement included in a regulatory filing Monday, the company said Antioco “would like to stay at the company as both chairman and CEO and earn his compensation. He encourages stockholders to require that he do so for the benefit of all the company’s stockholders by re-electing him to serve on the board.”
On Tuesday, Blockbuster released an excerpt from an internal email sent to employees addressing “media reports” suggesting Antioco was paid as much as $51.6 million last year.
“First of all, John did not make $51 million, as reported by some media outlets,” the email said. “The total compensation John was paid last year was approximately $7 million, including bonus.”
The $51 million figure, the email went on to explain, “includes the potential value of stock options and restricted stock grants John has received that are dependent on his continued long-term employment and significant future stock appreciation.”
Under terms of his contract, Antioco is entitled to terminate his employment at Blockbuster for “good reason.” The reasons could include not being re-elected to the board or no longer holding the chairman’s title. In that case, he would be entitled to receive a severance package estimated by the company at $54 million.
In addition to Antioco, current board members Linda Griego and Peter Bassi are up for re-election.
Shareholders are scheduled to vote on the competing slates at the company’s annual meeting in Dallas on May 11.