Proxy Contest To Replace Board at Obagi

Voce Capital Management LLC has announced intention to replace six members of the Obagi board of directors with independent nominees and demands that the company hold the annual meeting by Feb. 28, 2013.


In a letter sent today to Obagi, Voce criticized the board for continued mismanagement of the company, its refusal to address Voce’s demands for corporate governance reform and its unbending hostility toward all acquisition interest.

Directly addressing Obagi’s board members, Voce stated in its letter:

“Your failings as a Board are many and varied. But they all stem from a common flaw: Your incentives are misaligned with, and in many ways adverse to, those of shareholders. You have but a de minimis economic stake in Obagi’s success and it appears to us that your paramount objective is perpetuating your control over the Company at all costs. As a result of Stonington Partners engulfing influence, none of the normal checks and balances exist to hold you accountable or to keep you honest. Accordingly, we have concluded that the only way to fix Obagi – indeed, to save it – is with the replacement of the Board with new, independent directors.”

Voce’s nominees include Dr. George Lasezkay, the former head of strategy and corporate development for Allergan; Joseph Whitters, an advisor to Frazier Health Care and the chairman of the board of ,entor at the time of its $1 billion acquisition by Johnson & Johnson; Jim Hickey, who has served as chief executive of six different medical devices companies, and was recently the chairman of the board of Vital Images when it was acquired by Toshiba; Kristin McDonnell, who was recently CEO of Limelife, a female-oriented mobile media company, with two decades of previous senior marketing experience in a variety of consumer-oriented companies; Joseph Lash, a private equity investor, senior Wall Street advisor and experienced public company Board member; and one Voce representative, J. Daniel Plants, its managing partner and a former investment banking executive at Goldman Sachs and JPMorgan Chase.

Voce’s letter is also calling upon Obagi to hold the annual meeting no later than Feb. 28, 2013. Consistent with the concerns Voce has recently expressed about the destruction of value at Obagi, it states that “waiting until June to hold the annual meeting will likely result in the further deterioration of Obagi’s franchise value. The company simply cannot afford another six months of reckless leadership and wasteful spending on the board and CEO’s internet dream.”