Groupon Inc.said Monday that it is bringing on two new board directors to replace Starbucks Chief Executive Howard Schultz and venture capitalist Kevin Efrusy.
The newcomers, who will serve on the audit committee, are American Express Co.Chief Financial Officer Daniel Henry and Robert Bass, a retiring vice chairman at consulting firm Deloitte LLP. Henry was appointed Thursday to replace Schultz, who stepped down. Bass is retiring from Deloitte on June 2 and will stand for election at Groupon’s annual meeting later that month to replace Efrusy, who is not standing for re-election.
Groupon also filed its proxy statement Monday, showing a large decline in annual compensation for co-founder and Chief Executive Andrew Mason. His total compensation fell to $7,943 from $184,599 in 2010, stemming from Mason’s request to cut his 2011 base salary to $756.72 from $180,000. He also asked not to receive any bonuses or stock-based awards during the year because of his “substantial equity ownership” in the company, according to the proxy.
Mason owns 7.1 percent of Groupon’s Class A common stock and 41.7 percent of the company’s Class B common stock. The Class B stock is divided among Mason and his fellow co-founders, Eric Lefkofsky and Brad Keywell.
The three founders also serve on the board, a group that will remain at eight directors after the planned changes. Other members are Ted Leonsis, the vice chairman emeritus ofAOL Inc.; Mellody Hobson, president of Chicago-based Ariel Investments; and venture capitalist Peter Barris.
In a statement, Lefkofsky said Henry and Bass bring “deep financial, accounting and operational experience” to the board.
Groupon indicated last week that its board composition might be changing, a move that it characterized as normal for companies that have gone public. The daily deal juggernaut has struggled since last year’s initial public offering. In late March, it restated its fourth-quarter and full-year revenue, citing “material weakness” in financial controls. Groupon’s stock has dropped more than 40 percent since that disclosure.
Groupon shares closed Monday down $1.27, or 10.6 percent, at $10.71. They rose in after-hours trading but remain well below the company’s $20 IPO price.
Henry, 62, has been CFO at American Express since 2007 and has worked at the credit card company since 1990. He was previously a partner with Ernst & Young, the global accounting firm that was Groupon’s auditor during the IPO process and beyond. Groupon has brought on an additional firm since disclosing its material weakness and restating its revenues, although the board is recommending that shareholders at June’s annual meeting ratify Ernst & Young as the company’s independent registered public accounting firm for the 2012 fiscal year.
Bass is also 62 and has been a partner at Deloitte since 1982. In the proxy statement, Groupon said “his experience at the highest levels of a Big Four accounting firm will be an invaluable resource to the board in its oversight of the company’s SEC filings.”
Neither Schultz nor Efrusy are leaving the board because of disputes over Groupon’s operations, the company said in a separate regulatory filing Monday.
“Howard and Kevin helped guide us on our journey to becoming a public company, and I want to thank them and acknowledge their contributions,” Mason said in a statement.
Schultz and Efrusy offered statements of support for Groupon. Schultz joined the company’s board in February 2011. Efrusy is a general partner at venture capital firm Accel Partners, which invested in Groupon in 2009.
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