Activist Starboard Value Has Stake in Autodesk

Starboard Value has a roughly $500 million stake in Autodesk and is pushing for changes at the design-software maker, according to people familiar with the matter.

Starboard met with Autodesk executives in recent weeks to discuss concerns related to the company’s operations, corporate governance and the handling of a recent accounting probe that tanked the stock. The activist thinks the company should improve its margins and make changes to its board, the people said.

Autodesk has a market capitalization of nearly $50 billion. Shares of the San Francisco-based company are down 7% so far this year.

Autodesk provides engineering, 3D-design and entertainment software and services. Its customers have included Amazon Studios and Hyundai Motor Group, according to its website.

Autodesk shares have fallen steeply since touching a record high in August 2021. Shares took a tumble in April when the company delayed its annual financial report and disclosed it had opened an investigation into its accounting practices around free cash flow and operating margins.

Starboard in private conversations with Autodesk criticized the company for not disclosing the investigation and other material updates until after the company’s window for shareholders to nominate director candidates closed in late March, the people familiar with the matter said.

A securities filing shows Autodesk’s board and the Securities and Exchange Commission were aware of the probe in early March, weeks before Autodesk alerted shareholders.

Starboard is considering taking legal action to ask for Autodesk’s director-nomination window to be reopened and for the company’s annual shareholder meeting, currently set for July 16, to be delayed, the people added.

Later in May, Autodesk said the monthslong investigation stemmed from how the company was accounting for billings from multiyear software contracts. The delay in Autodesk’s annual filing stoked investors’ anxiety, but the company said the probe didn’t result in any adjustments to its financials. Its investigation did find that decisions about spending, collections and accounts payable were informed by how they were going to affect certain financial metrics.

Late last month, Autodesk named its previous audit committee chair, Betsy Rafael, as interim chief financial officer. She succeeded Deborah Clifford, who moved to the role of chief strategy officer.

The software maker said in a filing earlier this month it is cooperating with separate investigations by the SEC and the Justice Department following its internal probe.

The company’s current chief executive, Andrew Anagnost, took over the role in June 2017 after a stint as interim co-CEO. Anagnost succeeded Carl Bass, who resigned in February 2017 after Autodesk faced a pair of activists that secured board seats.

New York-based Starboard invests across sectors but is especially active in technology, including recent efforts at Salesforce, Wix.com and GoDaddy. Recently, the firm run by Jeff Smith has also secured board seats at Algonquin Power & Utilities and Outback Steakhouse parent Bloomin’ Brands.

Write to Lauren Thomas at [email protected]