The Party Is Over: The Board Of Imation Must Answer To Shareholders

Dec. 08, 2014 6:30 AM ETGlassBridge Enterprises, Inc. (GLA)
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  • Spear Point calls for the resignation of two board members of IMN.
  • Board compensation is completely out of line with the size and performance of IMN.
  • Since 2003, IMN has seen 92% of shareholder value disappear.
  • IMN board members are paid more than the directors of 3M, IMN's erstwhile parent.
  • Spear Point calls for significant reduction in board compensation at IMN.

Spear Point Capital Partners LLC

400 Poydras, Suite 2100

New Orleans, LA 70130

December 5, 2014

The Board of Directors

Imation Corp.

1 Imation Way

Oakdale, MN 55128

Re:The Party is Over: The Board Must Answer to Shareholders

Dear Members of the Board:

As we2 continue to explore how to best create value at Imation Corp. (IMN) ("Imation" or the "Company"), Board compensation relative to performance remains a key issue. On November 25, 2014, the Company announced that the Board of Directors had made certain changes to Directors' compensation. This action follows on the heels of our November 6, 2014 letter to shareholders in which we noted excessive compensation obviously devoid of any contingent relationship to financial performance. As the following research shows, the token changes in compensation are inconsequential gestures that for the Company's owners amount to insulting window dressing and indicates a disturbing lack of regard for the interests of shareholders. This utter cluelessness leads us to believe the Board by and large needs to be replaced.

To be clear, the announced changes amount to slightly more than a 10% potential reduction in total Board compensation after the changes take effect in May 2015. By comparison, shareholders have lost 33.5% of their value during the first 11 months of this year alone.3 Numbers like these only underscore the lack of seriousness with which this Company is being run. It would be humorous if it weren't for the unbelievable audacity of making such paltry changes. The Board still does not understand the extent to which they have mismanaged the Company. It is as though the house is on fire and they are out weeding the garden.

Board Compensation and Performance

Since the Company's inception, the Board of Directors of Imation has gouged shareholders with Fortune 500 levels of compensation for

This article was written by

SpearPointLLC profile picture
Spear Point is a private equity firm that specializes in transaction oriented activist strategies in undervalued micro, smid-cap publicly traded companies. Twitter: @SpearPointLLC

Disclosure: The author is long IMN. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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