BlockbusterMay 8, 2010
I am not a Blockbuster expert and don’t know any of the players personally, but the situation has caught my attention.
First, Gregory Meyer, who is challenging the incumbent board member, points to stock performance during the reign of the current CEO and the board member Meyer opposes. (Background: According to reputable news sources, Meyer wrote a letter to the board in 2005 urging them to focus on distribution through kiosks; no one from Blockbuster responded, and, as we all know, they also did not follow his advice. In addition, Meyer owns more stock than his opponent.)
Since Jim Keyes became CEO and Board Chair in July 2007, Blockbuster’s stock has plummeted from approximately $4.00 per share to $ .37.
Keyes publicly opposes Meyer’s board bid. Is this appropriate? I think not.
Particularly in a publicly-held company, a key responsibility of the board is to hold the CEO accountable. Although it is common practice that the CEO and Chair are one and the same, that situation creates inherent conflicts of interest.
It is noteworthy—and inappropriate, in my view—that Blockbuster’s CEO is taking a position on who should be elected to the board; i.e., to whom he should report.