Sotheby's has reached an agreement with activist shareholder Daniel S. Loeb, who has waged a public campaign for greater control of the auction house.
Sotheby's has expanded its board of directors to 15 members in order to incorporate Loeb, 52, CEO of New York hedge fund Third Point, along with his nominees Olivier Reza, a former investment banker, and Harry J. Wilson, a onetime hedge fund executive. Third Point holds 9.6 percent of Sotheby's outstanding shares, making it the largest shareholder.
Sotheby's CEO, William Ruprecht, maintains his place on the board despite Loeb's earlier call for his resignation in a letter that pointed out that Ruprecht holds very little of the auction house's stock. Loeb also accused the firm of giving away the store in negotiations with consignors to get multimillion-dollar works of art for its high-profile evening auctions. (Loeb later withdrew his call for Ruprecht's resignation.) In response, Sotheby's instituted a shareholder rights plan that included a "poison pill" provision that would dilute the value of an investor's shares if they amounted to more than 10 percent of the company's total.
Last month, proxy advisory firm Institutional Shareholder Services urged shareholders to vote for two of the three board members Loeb had suggested.
The company's annual meeting was to take place tomorrow but will now be adjourned to a later date, not yet announced, to allow for updated proxy solicitation materials to be distributed to Sotheby's shareholders.