{ "docId": "019dd923-622c-750b-8b98-b531f2b0553d", "docSlug": "c54d9b8bb206", "documentTitle": "Verint Systems, Inc. (VRNT)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-05-23 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 72, "pageCount": 108, "prevPage": 71, "nextPage": 73, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 0, "notes": "Uses callout boxes to present a direct contradiction between shareholder proposals and management's formal response.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-b531f2b0553d/72", "deckHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-b531f2b0553d#slide-72", "components": [ { "bbox": { "h": 0.06, "w": 0.966, "x": 0.017, "y": 0.0089 }, "kind": "callout", "text": "Why is revenue growth “the most significant driver of business performance” when ill-advised M&A could destroy (and has destroyed) significant shareholder value?", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ae4411e8-50bb-4f4a-8923-2abcb72d5bf8", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.966, "x": 0.017, "y": 0.0016799999999999999 }, "kind": "paragraph", "text": "Spruce Point believes that management teams of acquisitive companies should be evaluated on the basis of return on capital deployed: measures such as ROIC should be used in place of revenue, EBITDA, and other metrics which incentivize growing the business over creating shareholder value. In fact, shareholders have petitioned Verint management to adopt ROI and ROIC as long-term performance measurements in place of revenue and TSR in each of the last two years – and, in both years, management refused.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3fd4a1bd-7bd0-41fd-8a2b-52ff02e4b834", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.57, "x": 0.048, "y": 0.00452 }, "kind": "quote", "text": "Consider using return on investment (\"ROI\") or return on invested capital (\"ROIC\") as a long-term performance metric instead of revenue or relative TSR. - Shareholder Request, FY19 Proxy", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "55b63fd3-6669-46fc-a15d-cfcea1e80cab", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.13, "w": 0.57, "x": 0.048, "y": 0.0034500000000000004 }, "kind": "quote", "text": "Consider using return on invested capital (\"ROIC\") as a long- term performance metric instead of revenue or relative TSR. - Shareholder Request, FY19 Proxy", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6c06dce4-e276-408a-b119-eb098183a08c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.61, "x": 0.358, "y": 0.00598 }, "kind": "quote", "text": "We recognize that ROIC has a good correlation to share price in many industries, however we do not currently use ROIC as an internal performance measurement and we believe that, where possible, compensation metrics should match the day to day metrics used to run the business. We also note that return on investment metrics like ROIC are not common in the technology industry where it is critical to continuously reinvest for growth and to maintain leading edge products. We continue to believe that revenue growth is the most significant driver of our business performance and we pair revenue metrics with profitability metrics to ensure that management is focused not only on growth, but on profitable growth. - Management Response, FY19 Proxy", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d63a26d1-6d3b-4fd8-a373-fcae92c54aad", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"Consider using return on invested capital (\"ROIC\") as a long- term performance metric instead of revenue or relative TSR.\" — Shareholder Request, FY19 Proxy; \"We recognize that ROIC has a good correlation to share price in many industries, however we do not currently use ROIC as an internal performance measurement and we believe that, where possible, compensation metrics should match the day to day metrics used to run the business. We also note that return on investment metrics like ROIC are not common in the technology industry where it is critical to continuously reinvest for growth and to maintain leading edge products. We continue to believe that revenue growth is the most significant driver of our business performance and we pair revenue metrics with profitability metrics to ensure that management is focused not only on growth, but on profitable growth.\" — Management Response, FY19 Proxy", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2b65-734e-a974-f11aa08d1b99", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.11, "w": 0.65, "x": 0.308, "y": 0.025 }, "kind": "title", "text": "Management Incentivized To Grow The Business, Not To Create Value For Shareholders", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "51ec0818-2911-41e7-9ad6-bddff51e3b21", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "8ff020e6-b091-44fc-885a-38e68f980e5c", "evidence": "Contrasts shareholder demands with management's written response to expose misalignment.", "confidence": 0.95 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }