Martinez Steps Down as Deckers Corp. Chair After Investor Criticizes Mayoral Run
Mayoral candidate Angel Martinez has given up his post as Chairman of the Board of Goleta-based Deckers Outdoor Corp., the candidate confirmed, weeks after an activist investor lambasted his political campaign as a “distraction.”
The move, first reported by financial news service StreetInsider.com, followed harsh criticism of Deckers' financial performance, and of Martinez personally, by investor Mick McGuire, managing partner of Marcato Capital Management.
Martinez, who will remain on the board as a director, told Newsmakers that he had "resigned" as chair, not been "replaced."
"To be clear, I resigned my position to focus on the campaign, now that it is in full swing after the Labor Day holiday," he said in an email, "Saying I was "replaced" implies that it was a decision I was forced into making, which is not the case. I have no further comment, and would refer you to Deckers should you have any other question."
He served as President and CEO of Deckers from 2005-16, during which time the company grew appreciably, driven in large part by the global success of its UGG footwear line. He has served as board Chairman since 2008.
As a political matter, the news of his exit from the chairman’s chair could provide an opening for mayoral rivals to question his executive skills, which form the rationale for his candidacy. At the same time, however, it also frees him from the diversions of corporate warfare as he works to boost his profile while running in a crowded field against four better-known candidates.
Corporate shark tank. Tyler Hayden, news editor of the Independent, reported on Aug. 24 about McGuire’s effort to force Martinez out of the chairman’s position.
McGuire, whose company owns six percent of Deckers stock, has been pressuring the board to slash expenses and sell the company, during a time it has been conducting a “strategic review” of its future options.
“Our concerns are supported by a review of Deckers' history of underperformance, which is not the result of one-off events beyond the Company’s control, but is instead attributable to years of poor decision making and operational neglect, highlighted by a failed retail expansion strategy, runaway corporate expenses, and wasteful capital allocation,” McGuire wrote to the board in June.
“Lastly we observe that Angel Martinez, the Company’s Chairman and former CEO, has recently launched a campaign to be elected Mayor of Santa Barbara in this coming November’s election. These circumstances force shareholders to question whether the Board will have the appropriate leadership, focus, and urgency during this process,” he added.
Bottom line. With UGGs representing a huge share of its revenue, the company reported $122 million in profit on sales of $1.8 billion for fiscal year 2016, down from $161.8 million the year before.
Martinez received $5.7 million in total compensation last year, according to a report in the business website salary.com, including a salary of $1.2 million and $4.5 million in stock.
(Updated at 3:05 pm with Martinez full comment and several small editing changes).