Pierre Omidyar, the founder and chairman of online retailer eBay came out in support Thursday of his board and CEO John Donahoe, who were hit with a barrage of criticisms this week by billionaire investor Carl Icahn.
Omidyar, who became a billionaire at age 31 when eBay went public in 1998, called Icahn’s attacks on the board and Donahoe “false and misleading.” He rejected, once again, Icahn’s request to split PayPal, eBay’s financial transactions arm, from the larger company.
“After diligent consideration, we believe that PayPal and eBay are better together,” he said, echoing Donahoe’s recent string of public talks on this contested issue.
Icahn, who has a 2 percent stake in the online retailer, is also seeking two seats on eBay’s board. He has blasted directors Marc Andreessen of venture capital firm Andreessen Horowitz for profiting off eBay’s discarded assets, saying the VC didn’t do right by eBay shareholders by taking the lion’s share of the profits.
Andreessen is not up for re-election at eBay until 2015, and assured a seat on the board regardless.
Icahn also blasted eBay director Scott Cook, founder and director of Intuit, because he says Intuit’s payment processing business directly conflicts with PayPal’s.
eBay has countered that the overlap is too small to be significant.
But governance experts told The Post that having a competitor of any size on one’s board should typically be avoided.
“I think there’s a real problem with having a competitor on the board,” said Eleanor Bloxham, an advisor to boards. “I don’t see the reason, when you’ve got to many qualified board members, to invite conflicts of interest,” she said.
Having a competitor on the board raises questions of “strategy pricing and even anti-trust issues,” she warned.
Indeed, the Department of Justice in 2012 filed a civil antitrust lawsuit against eBay over alleged antitrust violations over it’s agreement to not hire or recruit Intuit’s employees.
The government has alleged that eBay violated anti-trust laws when it agreed not to poach Intuit’s top executives between 2006 and 2009 in exchange for the same protection. For more than a year the agreement also applied to all workers, the DOJ has alleged.
eBay recently asked that the case, filed in federal court in Northern California, be dismissed.