By Svea Herbst-Bayliss
BOSTON (Reuters) – Leaf Group said in a regulatory filing on Wednesday that one of its board members resigned and another was removed from the audit committee because he is ineligible to serve on it.
The move comes just days after an investor group, which owns 40% of the consumer internet company’s stock and is looking to oust the chief executive, pointed to conflicts on the board and suggests that Leaf Group has acknowledged a mistake.
A spokesman for Leaf declined to comment.
Mitchell Stern on Friday told the company that he was stepping off the eight-person board, Leaf said in the filing.
Leaf also said Charles Baker, who was appointed to the audit committee in May, “is unable to serve on the committee under applicable NYSE rules,” the filing said.
Leaf had said in its proxy that Baker is an independent director. But the group of six investors on Monday said Baker does not meet the NYSE’s criterion of being independent and called the company’s disclosures “misleading.”
The group, which includes Osmium Partners, PEAK6 Investments, Boyle Capital Opportunity Fund, Oak Management Corp, Generation Partners II LLC and Spectrum Equity Investors, is pushing to remove Leaf’s CEO, Sean Moriarty, refresh the board, have all directors elected annually, and consider the sale of the firm’s media and marketplace businesses.
They blame Moriarty for having lost 60% of their capital during his tenure. The stock price has tumbled 47% in the last 12 months alone. On Wednesday it closed at $3.93.
On Monday the group raised the pressure on Leaf by writing to its board that Moriarty and board member Baker had ties to each other that raised questions about Baker’s ability to “properly serve on the Company’s Audit Committee.”
(Reporting by Svea Herbst-Bayliss; Editing by Leslie Adler)
