Envestnet adds three board members to avert proxy contest

Envestnet appointed three people to its board of directors to settle a proxy dispute with Impactive Capital.

Lauren Taylor Wolfe, Impactive Capital’s co-founder and managing partner, and Wendy Lane, chair of private equity firm Lane Holdings, joined Envestnet’s board on March 27. Wolfe’s and Lane’s appointments are part of a long-term cooperation agreement between Envestnet and Impactive.

Envestnet also agreed to put forth a proposal to declassify its board at the 2024 annual meeting, and Impactive agreed to customary standstill, voting, confidentiality and other commitments.

The two join Barbara Turner, the former CEO of Ohio National Financial Services, who was added to Envestnet’s board on March 22 as part of what the company described in a statement as part of an “ongoing refreshment process.”

"These appointments were informed by Envestnet's ongoing dialogue with shareholders as we continue to execute on our strategic plan to deliver enhanced value to shareholders,” James Fox, chairman of Envestnet’s board of directors, said in a statement. “We appreciate the collaboration with Impactive, with whom we have maintained an ongoing dialogue in reaching this agreement."

In November, Impactive, a $2.8 billion hedge fund that owned a 7.5% stake in Envestnet, published an open letter expressing dissatisfaction with Envestnet’s stock price which had underperformed the S&P 500 by 61%.

Impactive initially asked for a single seat on Envestnet’s board before upping the ante to four seats in January. In addition to Wolfe and Lane, Impactive nominated Tom Naratil, former president of UBS Americas, and Michael Stanton, former chief financial officer of software company Diligent Corp.

Wolfe said she was pleased to reach an agreement with Envestnet to bring fresh perspectives and ownership mentalities to the board.

“As long-term investors, Impactive believes in the considerable future potential of Envestnet's business," Wolfe said in a statement.

"Our progress over the last year, coupled with the investments we have made in the business, provides us with confidence that Envestnet is on the path to unlocking the revenue potential and margin expansion of our connected ecosystem," added Bill Crager, Envestnet’s co-founder and CEO.