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Blockbuster Supports Board Member Re-election

27 May, 2010 By: Erik Gruenwedel

Blockbuster May 27 reiterated its support for the re-election of board member Gary Fernandes, a day after dissident shareholder Gregory Meyer redirected his attack on the former vice chairman of Electronic Data Systems Corp.

Meyer, who owns 620,000 shares of Blockbuster common stock, is making an unsolicited attempt to win a seat on the Dallas-based DVD rental company’s seven member board. Meyer initially sought to unseat board member James Crystal, criticizing him for not recognizing the threat of rental kiosks and Netflix, among other issues.

Crystal, who announced he would not seek re-election, was replaced by Blockbuster on the ballot with cable executive Kathleen Dore.

Meyer, who once owned a kiosk business, has based much of his criticism on a letter he sent to the board five years ago warning about the negative impact kiosks could have on Blockbuster’s store-based business.

In a letter to shareholders, Ed Bleier, chairman of the board's nominating/corporate governance committee, said Fernandes’ IT experience would be key as Blockbuster transitions from a store-based business to digital downloads, mail services and automated retail kiosks.

“Gary has an impressive record of business accomplishments and more valuable experience than Meyer,” Bleier wrote in the letter. "Meyer offers nothing constructive or helpful. He repeats his overly simplistic observations which only demonstrate a lack of understanding about the complex challenges Blockbuster faces.”

Blockbuster holds its annual shareholder meeting June 24 in Dallas.

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