Billionaire investor Carl Icahn and two other dissidents easily won election yesterday to the board of ailing video rental giant Blockbuster Inc., replacing Chief Executive John Antioco and two other directors.
But, in a conciliatory move, Antioco was likely be reappointed later this week to the board of the Dallas-based company, with Icahn's blessing.
Under a plan being discussed, Antioco would retain his position of chairman and continue serving as CEO. One reason: Blockbuster could be on the hook for about $54 million in severance if Antioco leaves the company altogether, which he threatened to do if he lost yesterday's vote.
Icahn's victory during Blockbuster's annual meeting in Dallas is the latest upheaval for a company that has stumbled badly, even as it remained by far the nation's dominant video store chain.
Blockbuster has been under siege by mass merchandisers such as Wal-Mart Stores Inc. that sell low-priced DVDs, while online rental companies such as Netflix Inc. have eaten away at its market.
Icahn's steady drumbeat of criticism over what he argued were Antioco miscues and excessive bonuses resonated with shareholders.
Preliminary results showed 77 percent of the votes cast went to Icahn and his two candidates, former music executive Strauss Zelnick and Edward Bleier, a former top Warner Bros. executive.
The veteran corporate raider savored the victory. In a prepared statement, Icahn said he was "elated by this grand victory for corporate governance."
He also extended an olive branch to Antioco, with whom he had engaged in a bruising public feud over the future of the company.
"My nominees and I are looking forward to working hand in hand with the rest of the board and Mr. Antioco," Icahn said.
But in an interview with CNBC, Icahn suggested the decision to invite the executive back on the board had more to do with avoiding paying a "golden parachute" to Antioco.
"The board was able to cure the default, so to speak," said Icahn, who did not return calls seeking comment.
Icahn's victory is expected to give him considerable clout. Final voting results won't be available for several days, but Blockbuster all but conceded defeat.
In a news release, Antioco was circumspect about his plans. The former Taco Bell executive was hired as Blockbuster chief in 1997.
"Blockbuster is a world-class brand that I believe has great potential for future success," Antioco said. "I continue to believe in the business strategy we have been implementing."
Although Antioco did not confirm whether he would accept reappointment to the board, all indications were that he will. Also losing their seats in the vote were restaurant executive Peter Bassi and Los Angeles businesswoman Linda Griego.
Wall Street sent Blockbuster shares up 21 cents, to $10.05, yesterday on the New York Stock Exchange.
The Los Angeles Times is a Tribune Publishing newspaper.
