eBay shareholders asked John Donahoe some interesting questions on Tuesday following the annual shareholders meeting in San Jose. The CEO found himself fielding questions about rival Amazon, about Bitcoin and about a controversial seller policy.
First, during the official meeting, shareholders voted to reelect four board members, including Donahoe himself. They approved compensation of named executive officers; approved an amendment and restatement of the 2008 Equity Incentive Award Plan, including to increase the aggregate number of shares authorized for issuance under the plan by 21.6 million shares; and ratified the appointment of PricewaterhouseCoopers LLP as independent auditors.
They rejected a proposal presented by fellow shareholder John Chevedden regarding stockholder action by written consent without a meeting.
Donahoe then made a presentation to shareholders, providing some 2013 results and the company’s most recent financial guidance. He also showed slides explaining why the board felt eBay and PayPal belonged together, a decision he’s had to defend after a campaign this year by investor Carl Icahn to have eBay spinoff PayPal.
That was followed by a presentation by Rev. Jesse Jackson who made a statement calling for tech companies like eBay to take action to promote diversity, part of the Rainbow Push Coalition’s digital inclusion initiative.
During the Q&A period that followed the presentations, a shareholder congratulated eBay on its new seller procedures, and said he’s been a seller “forever,” and he’s “never had it so easy to sell.” He also said he believed eBay and PayPal should stay together, and commented about eBay’s diversity. Nobody knows who buyers are or what they look like, and “it couldn’t matter less. Everyone has an equal opportunity,” he said.
Another shareholder who sells on eBay told Donahoe he would lose his Top Rated Seller status in August due to tracking requirements that require TRS sellers to upload tracking on 90% of their shipments. He places orders for lightweight items into USPS First Class envelopes along with a tracking bar code, but the Postal Service won’t scan them. He suggested eBay make an exception to the tracking requirement for small, lightweight items that the Postal Service won’t scan.
Donahoe thanked the seller for his suggestion and said “I’m certain Devin (Wenig) and his team will take it.”
Carl Davis, Jr of the Silicon Valley Black Chamber of Commerce asked Donahoe what he thought of Bitcoin in regards to global trade. The CEO called it a new, exciting and emerging technology. “We think Bitcoin will play a very important role in the future. Exactly how that plays out, and how we can best take advantage of it and enable it with PayPal, that’s something we’re actively considering. It’s on our radar screen.”
The last question was from a shareholder who asked Donahoe about eBay rival Amazon. “We know they don’t care about profits, and you do. How do you compete?”
“We are blessed with a business model that if we deliver for all our buyers and sellers, our marketplace produces profitability and cash flow,” said Donahoe. “So we don’t see it as a zero sum game with Amazon,” adding there was room for multiple winners.
“I think an important move we made several years ago is now, eBay doesn’t succeed unless you succeed. If you don’t sell, we don’t get anything. And I think that’s an important move where our fees, our take rate, our revenue, our profits only occur when sellers like you all over the world successfully sell something.”
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