DEFA14A: Xperi Receives Support from Glass Lewis for All Board Candidates Amidst Rubric Capital Challenge

Glass Lewis, a leading proxy advisory firm, recommends Xperi stockholders vote for all of the company's director nominees, joining ISS in rejecting Rubric Capital's proposed changes to the board.

Summary

• Xperi Inc. announced that Glass Lewis & Co., LLC, a second independent proxy advisory firm, supports all of Xperi's director nominees for the upcoming 2024 Annual Meeting of Stockholders.
• Rubric Capital Master Fund LP has nominated two candidates to replace half of Xperi's independent directors.
• Glass Lewis, like Institutional Shareholder Services (ISS), does not believe Rubric has made a persuasive case for change.
• Glass Lewis rejected Rubric's claim that Xperi has underperformed or is on a path of missing guidance, noting that consensus estimates for 2024 revenue and EBITDA margin align with communicated midpoints.
• Glass Lewis acknowledged the merit of Xperi's recent capital allocation decisions, including the sale of AutoSense, the strategic review of Perceive, and the share repurchase program.
• Glass Lewis raised concerns about Rubric's candidates, questioning their relevance to Xperi's current product focus and potential impact on board oversight.
• The Xperi Board encourages stockholders to vote for all five of its director candidates using the BLUE proxy card.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the support from proxy advisory firms, which increases the likelihood of the current board being re-elected. However, the ongoing challenge from Rubric Capital introduces some uncertainty.

Positives

• Two leading independent proxy advisory firms, Glass Lewis and ISS, have recommended that stockholders support all of the Board's nominees.
• Glass Lewis believes Xperi remains on track to achieve its stated goals.
• Glass Lewis supports Xperi's capital allocation decisions, including the AutoSense sale and potential Perceive divestiture.
• Glass Lewis finds Xperi's executive compensation programs aligned with performance.

Negatives

• Rubric Capital is attempting to replace half of Xperi's independent directors.
• Glass Lewis has concerns about Rubric's candidates' relevance to Xperi's current product focus and potential impact on board oversight.

Risks

• The outcome of the vote at the Annual Meeting is uncertain.
• The company acknowledges risks and uncertainties that may cause actual results to differ from forward-looking statements, as detailed in their SEC filings.

Future Outlook

The company's future results of operations and financial position, margin expansion and overall growth, including anticipated Adjusted EBITDA growth, objectives for future operations, and ongoing strategies, including the pursuit of strategic alternatives for Perceive, are forward-looking statements based on current expectations, assumptions, estimates and projections that involve risks and uncertainties.

Management Comments

• The Board said, 'We are pleased that both leading independent proxy advisory firms, Glass Lewis and ISS, have recommended that stockholders support all of the Boards nominees at this years annual meeting.'
• The Board continued, 'like ISS, Glass Lewis did not find cause to disrupt a strategy and team that are delivering results.'
• The Board urges stockholders to vote FOR all five of Xperis skilled and experienced director candidates, and WITHHOLD on Rubrics two candidates, using the BLUE proxy card.

Industry Context

This announcement reflects the ongoing trend of activist investors challenging corporate boards and strategies, and the importance of proxy advisory firms in influencing shareholder votes.

Comparison to Industry Standards

• The support from both ISS and Glass Lewis is a positive sign for Xperi, as these firms' recommendations often carry significant weight with institutional investors.
• The proxy fight with Rubric Capital is similar to other situations where activist investors seek to influence company strategy and board composition, such as Nelson Peltz's campaign at Disney or Carl Icahn's involvement with various companies.

Stakeholder Impact

• The outcome of the vote will impact the composition of the Board and potentially the company's strategy.
• The Board urges stockholders to vote FOR all five of Xperis skilled and experienced director candidates, and WITHHOLD on Rubrics two candidates, using the BLUE proxy card.

Next Steps

• Stockholders will vote on the director nominees at the Annual Meeting on May 24, 2024.

Key Dates

Keywords

Xperi, Glass Lewis, Proxy Advisory, Rubric Capital, Board of Directors, Annual Meeting, Stockholders, Director Nominees, ISS, Corporate Governance