Starboard delivers letter to Autodesk shareholders regarding board

Starboard Value, a significant stockholder of Autodesk (ADSK), with an ownership stake valued at more than $500M, announced that it has delivered a letter to the company’s shareholders. The letter read in part: “As you know, Starboard Value LP is a large shareholder of Autodesk, with an ownership stake valued at more than $500 million. As we have outlined in our public letters and presentation and discussed with many of you over the last year, our goal is to see Autodesk perform up to its potential. We invested in Autodesk based upon our belief that the Company is among the highest-quality subscription-based software businesses in the world, but one that has severely underperformed its true underlying potential. Autodesk’s long history of financial and operational underperformance – best characterized by subpar profitability and consistently missed Investor Day targets – has led to a severe lack of management credibility and significant shareholder frustration. Shareholders’ concerns regarding Autodesk were heightened by last year’s Audit Committee investigation, which apparently found that the Company intentionally misled shareholders regarding its billings practices as it manipulated free cash flow in an attempt to meet certain financial targets. Moreover, the decision made by the Board of Directors to not impose any true consequences for those involved in these deceptive practices raised further concerns regarding the Company’s governance and oversight practices. Taken together, these issues – subpar profitability, missed Investor Day targets, misleading disclosures, and poor governance and oversight – suggest that Autodesk is plagued by a stunning lack of accountability to shareholders from management and the Board. Regrettably, for the vast majority of our engagement to date, we believe Autodesk has been quick to dismiss shareholders’ concerns, claiming instead that the Company is performing according to plan and governed appropriately. However, the stock market provides the ultimate scorecard: Autodesk’s share price has meaningfully underperformed over the long-term.”