Pitney Bowes CEO Steps Down After Investor Pressure

Glenn Taylor
·4 min read

The CEO of Pitney Bowes stepped down after an investor pressured the shipping company to find new leadership.

Marc Lautenbach, who had served as president and CEO of Pitney Bowes since December 2012, is leaving the post as the company aims to engineer a turnaround under a new restructuring plan.

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Jason Dies, who most recently served as the company’s executive vice president and group president, has been appointed interim CEO, effective immediately.

Pitney Bowes’ stock popped more than 15 percent on the news Monday.

The Pitney Bowes board will consider internal and external candidates in the search for a new permanent chief executive.

Lautenbach is also stepping down from the company board, which formed a long-term planning committee to lead the CEO search.

In September, investment advisory Ancora Holdings Group, which said it holds a “meaningful amount” of Pitney’s debt, called for the company to replace Lautenbach as well as board chair Mary Guilfoile.

The hedge fund wanted Pitney to cut up to $100 million in corporate overhead costs, and look into selling the struggling Global Ecommerce (GEC) business-to-consumer logistics services unit, which has seen earnings decline since 2015.

“We believe [Lautenbach’s] proclivity for burning shareholders’ capital and presiding over value destruction is only exceeded by his tendency to mislead the market about GEC,” the letter said. “While we suspect someone as seemingly egotistical and detached from reality as Mr. Lautenbach may say anything to cling to his role for as long as possible, we urge the board to recognize that his near-term departure represents addition by subtraction.”

Ancora suggested that “there are strategic buyers that would be interested in acquiring all or part of the segment,” and that “a timely divestiture would be applauded by the market.”

At the time, Ancora said it didn’t have strong opinions on Lautenbach’s replacement “as long as one of his failed deputies is not elevated.” While it didn’t name names, Dies might not satisfy the hedge fund because he has worked under the CEO since joining Pitney Bowes in 2015.

What works in Dies favor is that he was responsible for overseeing Pitney’s cloud-based letter mailing and parcel shipping software solution SendTech and mail sorting and distribution service Presort—two units Ancora and other stakeholders want the company to prioritize going forward.

For nearly a year, Pitney Bowes has been dealing with unrest from various stakeholders, particularly due to its focus on the money-losing GEC segment. One of its largest shareholders, hedge fund Hestia Capital, also had called for a new CEO and wanted to shake up the company board.

At Pitney Bowes’ annual shareholders meeting in May, four of Hestia’s nominees were elected to the then-nine-person board. But Hestia did not get enough nominees elected to gain control at the time.

Now, with Lautenbach’s resignation, Hestia will have a bigger say in the next Pitney Bowes CEO as the hedge fund has four of eight votes on the board. Hestia founder Kurtis Wolf, who was one of the four elected to the board, also serves as co-chair of the company’s CEO search committee.

The second quarter reflected the financial problems at Pitney Bowes, with net losses totaling $141.5 million on a revenue decline of 11 percent to $776.5 million. Revenue at the Global Ecommerce fell 21 percent to $312.8 million, with a negative earnings before income tax (EBIT) of $38.1 million.

In its second quarter earnings call, chief financial officer Ana Maria Chadwick said the firm had a restructuring charge of $22 million after reducing headcount and shifting more processes to shared service centers.

The company is on track to deliver $75 million in annual expense savings by year-end 2024 from the restructuring plan and improved productivity.

“It has been an honor and a privilege to lead this iconic company for over a decade,” said Lautenbach in a statement. “As proud as I am of what has been accomplished, I am particularly proud of our team, who has always been guided by our ‘true north’—our value of doing the right thing the right way. I am confident that this value will continue to guide our company’s journey going forward.”

As interim CEO, Dies will focus on the restructuring an cost cuts while also working with the leaders of SendTech, Presort and Global Ecommerce to identify opportunities to strengthen performance and market positioning.

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