The biggest departure this year from Compuware was Karmanos, 70, who retired as board chairman on March 31. After the company canceled for financial reasons two Detroit events meant to honor the co-founder, Karmanos’ wife, Danialle Karmanos, delivered a sharply worded e-mail this spring to the board and management that denounced the “sinister and vile move.”
Relations hit a new low in September when Pete Karmanos offered profanity-laced criticism of Compuware’s management and Elliott Management after a public event.
Last month, he sued Compuware in Wayne County Circuit Court to recoup millions of dollars in stock options that were allegedly taken on Oct. 1, when the company canceled his $600,000-per-year consulting contract over the critical remarks.
Three other directors have stepped off Compuware’s 11-member board this year and were quickly replaced by out-of-state residents. One of the former board members, Ralph Szygenda, a tech consultant and former General Motors executive, resigned from both Compuware and Covisint boards.
Such board member shuffling is common among publicly traded companies under pressure from activist shareholders.
Compuware has repeatedly delayed its annual meeting and extended the nomination period for board members to Jan. 10.
Gordon, the U-M professor, said activists such as Elliott Management are likely exerting “push-and-pull” pressure to change the composition of Compuware’s Karmanos-era board. Early on, Elliott Management expressed concerns with a perceived lack of tech expertise on the board and its heavy Detroit-area makeup.
“The push is to get the dead wood out that was perfectly happy to collect directors fees for a decade but did nothing to enhance shareholder value,” Gordon said. “The pull is to get your own directors in who will stop resisting the takeover.”
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