Cornerstone OnDemand Announces Corporate Governance Changes
SANTA MONICA, Calif. – January 17, 2018 – Cornerstone OnDemand (NASDAQ:CSOD), a global leader in cloud-based learning and human capital management software, today announced plans to make several changes to its corporate governance structure as part of its broader strategic transformation plan outlined in November 2017. Cornerstone will separate the chairman of the board and CEO roles and move to declassify its board of directors. Additionally, long-tenured directors Mark Baker, Hal Burlingame and Joe Payne announced their plans to retire from the board.
The company plans to separate the chairman and CEO roles when a new chairman is appointed. Adam Miller, who currently serves as both chairman and CEO of the company, will continue to serve as a director and CEO once the appointment is made.
Cornerstone’s board of directors also announced it will be submitting a proposal to stockholders to declassify the board. Currently, the company’s three classes of directors are elected for staggered, three-year terms. Declassification of the board would enable Cornerstone’s stockholders to vote annually on the election of all directors. The proposal to declassify will appear on the ballot at the company’s 2018 annual shareholder meeting, and requires the support of the holders of 70 percent of outstanding shares of the company’s common stock to be adopted. If stockholders approve the proposal, directors standing for election in 2019 and beyond would be elected to one-year terms.
Regarding the retirement of Mr. Baker, Mr. Burlingame and Mr. Payne as directors, Mr. Baker will retire at the company’s 2018 annual shareholder meeting after 15 years of service. Mr. Payne and Mr. Burlingame will retire when their terms expire at the company’s 2018 and 2019 annual shareholder meetings, respectively. In connection with these announced retirement plans, directors Dean Carter and Joe Osnoss will join Robert Cavanaugh on the nominating and corporate governance committee, which Mr. Osnoss will chair. The committee is working closely with the full board, Silver Lake and other shareholders to identify additional world-class directors for the board.
“Mark, Hal and Joe all have played critical roles at various stages in helping Cornerstone grow and reach its current scale,” said Mr. Miller. “We are deeply grateful for their service, dedication and significant contribution to Cornerstone’s success over the years.”
A number of Cornerstone shareholders voiced their support for the changes: Ricky Sandler, Chief Executive Officer of Eminence Capital, a 9.9 percent Cornerstone shareholder, said, “We support the corporate governance changes announced today by the company. These changes, along with the operating transformation already underway following a recent strategic review by the board, are very positive steps towards maximizing the shareholder value of this strong franchise. We commend the board on its actions over the past year and are fully supportive of the company’s current direction.”
"We believe strong corporate governance is a key ingredient in creating long-term shareholder value and are pleased with the direction the company is heading,” stated Robert Moses, managing partner of RGM Capital, a 5 percent Cornerstone shareholder.
“We believe these important corporate governance changes, coupled with the company’s best-in-class technology and new strategic plan, will help drive long-term shareholder value,” said Kevin Oram, managing partner of Praesidium Investment Management Company, LLC, also a 5 percent Cornerstone shareholder.
“We support the governance changes Cornerstone announced today, which we believe will better support the company in its efforts to capitalize on its industry-leading position and set the table for future growth and financial success,” said Arthur Young, managing partner of Cornerstone shareholder Tensile Capital Management.
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