By Lauren Thomas

Activist investor Starboard Value is preparing to wage a proxy fight at Autodesk, where it is seeking improvements to boost shares of the software-design maker.

The details

Starboard said Wednesday morning it has a more than $500 million stake in Autodesk and intends to nominate a minority slate of director candidates ahead of the tech company's coming annual meeting. This confirmed an earlier report from The Wall Street Journal.

Starboard said in a letter to the company that was made public that it believes Autodesk has been underperforming the software and broader markets in recent years.

Starboard last year lost a legal fight to block Autodesk from holding a board meeting, after missing a March deadline to nominate directors. At the time, Starboard argued Autodesk was misleading investors around an accounting probe.

The Journal reported last summer that Starboard had taken a stake in Autodesk and was pushing for margin improvements and board changes, among other things.

Starboard later said it wanted the company's board to reassess Chief Executive Officer Andrew Anagnost, who has helmed the business since mid-2017. (Anagnost succeeded Carl Bass, who resigned in February 2017 after Autodesk faced a pair of activists who secured board seats.)

The context

Autodesk, which provides engineering, 3D-design and entertainment software and services, has made some changes since. Earlier this year, the company said it would eliminate about 9% of its workforce, or about 1,350 employees, as part of a global restructuring plan.

And the company named two new directors in December and has announced that other directors won't stand for re-election this year.

Anagnost said in late February that the company was focused on reallocating resources toward key business areas, such as artificial intelligence.

Investors are looking for more. Autodesk shares have fallen steeply since touching a record high in August 2021. The stock is down about 12% so far this year as of Tuesday, giving Autodesk a market value of around $55 billion.

Shares took a big tumble last year when Autodesk delayed its annual financial report and disclosed it had opened an investigation into its accounting practices around free cash flow and operating margins.

The probe didn't result in any adjustments to its financials but did find executives had shifted certain charges and payments to affect results.

Starboard believes Autodesk hasn't held anyone accountable for its accounting issues, as well as general operational performance of late. The activist is also concerned by the company's full-year guidance.

"We believe Autodesk should be realizing significantly more margin improvement this year than is currently being forecast," Starboard said in its letter published Wednesday.

Starboard invests across sectors but is especially active in technology, including efforts at Salesforce, chip maker Qorvo and bitcoin-mining operator Riot Platforms. Recently, Starboard, run by Jeff Smith, secured a spot on the board of pharmacy supplier Kenvue, averting a full-fledged proxy fight.

Write to Lauren Thomas at lauren.thomas@wsj.com

(END) Dow Jones Newswires

March 19, 2025 09:28 ET (13:28 GMT)

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