PeopleSoft nominated four sitting board members for re-election, most notably the companys CEO, Craig Conway. The three additional members include George Battle, Frank Fanzilli and Cyril Yansouni.
ISS, which advises clients on how they should cast their votes in annual shareholder meetings, took issue previously with PeopleSofts refusal to deal with Oracle regarding its now $9.4 billion bid for the company.
Last summer Oracle, of Redwood Shores, Calif., launched a hostile takeover bid at PeopleSoft. An arch rival of PeopleSoft in the e-business applications market, Oracles first offer was for $16 per share—well below PeopleSofts average trading price in the $20 per share range. Oracle then raised its bid to $19.50 a share, and later to the current $26 per share.
PeopleSofts Board of Directors steadfastly refused to entertain Oracles offers, saying each one undervalued the company.
Taking a bit more of a stealth approach, Oracle also attempted to win PeopleSoft through a proxy battle. On Jan. 23 the company announced its own slate of five nominees for PeopleSofts board.
With only four seats up for election, Oracle promised it would lobby to change the boards bylaws and have a fifth seat opened up—which would mean the removal of Michael Maples, who joined the board as a result of PeopleSofts late August acquisition of J.D. Edwards & Co.
After the U.S. Department of Justice said on Feb. 26 that it would immediately file suit against Oracle to block the PeopleSoft deal, Oracle withdrew its slate of nominees for PeopleSofts board.
ISS, for its part, said the reasoning behind its decision to back PeopleSofts nominees is that shareholder value would be eroded if the customer base is put at risk—and that the directors acted in the best interest of shareholders.
"With their backs against the wall, these directors fought hard to control the exodus of their customers. We believe that Oracles initial threats of dropping support to PeopleSoft customers in a successful takeover scenario are legitimate concerns for PeopleSoft customers," said ISS in a statement released on Friday.
After meeting with PeopleSoft executives earlier this month, ISS concluded that its directors "appear to have acted in a manner consistent to fulfilling their obligations to shareholders."