Starboard Value Criticizes Autodesk Board in Letter, Believes Investors Were Intentionally Misled — Update

By Denny Jacob

Starboard Value issued a letter to Autodesk’s board critiquing its oversight of management over actions it believes intentionally misled investors.

The activist investor, which has a roughly $500 million stake in the design-software maker, said it issued its letter to highlight shareholders’ dissatisfaction with Autodesk’s response to disclosure and governance issues that were recently disclosed from an investigation by its audit committee.

Autodesk in May said it wouldn’t restate previous financial results following a probe of its accounting practices that found executives had shifted certain charges and payments to affect results. The company at the time said its investigation found that decisions about spending, collections and accounts payable were informed by how they would affect certain company financial metrics.

“It is abundantly clear to us that management took several actions to intentionally mislead investors – these were not accidents,” said Jeffrey Smith, managing member at Starboard. “Furthermore, we find it almost impossible to believe there were not more members of management, and potentially the board, who were aware of these issues.”

“Autodesk’s board and management team are always open to input from our investors and offered to work constructively with Starboard, and we continue to engage extensively with our shareholders,” said a company spokeswoman. “We have the right management team in place to execute our plan to drive sustainable shareholder value, overseen by an experienced, engaged and highly qualified board that is focused on holding management accountable for performance.”

Starboard reiterated its belief that Autodesk can improve growth and profitability through its margins by reducing expenses in multiple cost centers.

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