{ "docId": "019dd923-622c-750b-8b9d-2310ae33859a", "docSlug": "088de79b26ea", "documentTitle": "LivePerson, Inc. (LPSN)", "authorId": "03_Starboard_Value", "authorName": "Peter Feld", "documentKindSlug": "shareholder-letter", "documentKindLabel": "Shareholder letter", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2022-05-09 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 5, "pageCount": 6, "prevPage": 4, "nextPage": 6, "slideType": "villain_critique", "function": "name_villain", "density": "dense", "nDataPoints": 3, "notes": "This is a text-heavy page from a shareholder letter, likely an activist investor campaign document.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9d-2310ae33859a/5", "deckHref": "/decks/019dd923-622c-750b-8b9d-2310ae33859a", "deckJsonHref": "/decks/019dd923-622c-750b-8b9d-2310ae33859a.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9d-2310ae33859a#slide-5", "components": [ { "bbox": null, "kind": "callout", "text": "We believe this incident illustrates both the Company’s cultural issues as well as the Board’s failure to instill accountability and provide effective oversight of the Company.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-e6ec-7186-b7c0-0ba7a08cc994", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.78, "x": 0.11, "y": 0.78 }, "kind": "paragraph", "text": "Collectively, we believe these issues can be fixed, however, a critical first step is reconstituting the Board with new, highly qualified and independent directors who have relevant experience and who are committed to providing effective oversight and instilling accountability in the boardroom. Despite our sincere desire to reach a mutual resolution with the Company, to date, the Board appears unwilling to accept any settlement that would include the level of change we believe is absolutely necessary to put LivePerson on a path to long-term success.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "316bacb0-91aa-4713-a365-87831c539950", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.28, "w": 0.78, "x": 0.11, "y": 0.09 }, "kind": "paragraph", "text": "In 2006, a lawsuit was brought against the Company for gender discrimination, retaliation, wrongful termination, and fraudulent inducement/misrepresentation. In this lawsuit, the plaintiff (a former female employee) raised concerns of discrimination and unfair treatment by Mr. LoCascio, among others, to current Board member William Wesemann. The lawsuit alleges that although Mr. Wesemann was under the obligation to report and investigate these claims without prejudice or fear of retaliation, instead he ultimately deferred the handling of the matter to Mr. LoCascio who promptly terminated the plaintiff shortly after the concerns were raised. We are deeply troubled not only by the plaintiff's serious allegations of misconduct, but also the manner in which they were allegedly dealt with by the Board. We believe this incident illustrates both the Company's cultural issues as well as the Board's failure to instill accountability and provide effective oversight of the Company. This lawsuit seems to have been settled quickly and without any disclosure regarding remuneration to the plaintiff or other terms.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "80af7a99-8bbd-4e90-a71e-345757358e66", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.78, "x": 0.11, "y": 0.62 }, "kind": "paragraph", "text": "While the Company's directors have stood idly by, tacitly endorsing management's stewardship of the Company, they have been actively liquidating their holdings in the Company. During 2020 and 2021, while promising accelerating growth, profit, and value creation for stockholders, the directors and officers collectively sold almost $40 million of the Company's stock. Remarkably, there has not been a single officer or director who has demonstrated his or her faith in the Company by purchasing shares on the open market at any time in the past three years, even following the fourth quarter 2021 earnings release on February 24, 2022, when the Company's stock price declined 26% on the following day and over 70% from its peak.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9e409ee5-30c6-4f1b-b722-703d057bfcd7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.23, "w": 0.78, "x": 0.11, "y": 0.38 }, "kind": "paragraph", "text": "Beyond the serious cultural issues highlighted in this letter and the operational and financial issues we have previously disclosed, we continue to believe there are also significant issues with corporate governance, compensation practices, and overall board function. We believe the Board's ineffectiveness may be in part due to the unchecked power of the founder, Rob LoCascio, who serves as CEO and Board Chair. Despite extremely poor results, Mr. LoCascio retains these combined roles, which is out of touch with best-in-class governance practices. To make matters worse, the Board does not even have a lead independent director, which we find entirely inexcusable. We believe this may be the result of the Board not knowing what good governance looks like, as not a single member of the Board has ever served on another U.S. public company board or has any meaningful enterprise software experience.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fd5a4245-17c6-45f0-945c-8f7330772239", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.78, "x": 0.11, "y": 0.88 }, "kind": "source-note", "text": "3 See Cash v. LivePerson, Inc., et al., Index No. 106522/06 (N.Y. Sup. Ct. May 11, 2006). 4 Source: Public company filings. Represents the aggregate value of stock sold on the open market by the Company's Board of Directors, John Collins, and Monica Greenberg. Includes transactions made pursuant to Rule 10b5-1 trading plans as well as stock sold to cover personal tax liabilities incurred in connection with the vesting of stock grants. 5 Officers and Directors defined as the current Board of Directors, John Collins, and Monica Greenberg.", "attrs": { "numbered": true }, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "fa423821-1e21-4942-b921-af21e9fe15ef", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [ { "to": 5, "from": 2, "name": "The Reveal", "slug": "05-the-reveal", "bestFor": "Product launches, strategic pivots, unexpected findings", "matchId": "ce56f6a9-2c8b-4672-b97e-592835c18030", "evidence": "The presentation of several issues with the current management", "position": 0, "objective": "Reveal the issues with the current management", "structure": "Setup the Question -> Build Suspense -> The Big Reveal", "confidence": 0.7, "description": "Build mystery and anticipation, then deliver a surprising or powerful conclusion" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }