Acxiom Corp. said last week it is seeking “strategic alternatives” for its Marketing Solutions division, including a potential sale of the core business that propelled the company’s growth as an industry leader in data management and direct mail marketing.
In connection with that critical business decision, Acxiom said the company’s board of director’s compensation committee also approved an incentive plan for the marketing division’s two top company executives, tying the cash bonus to the sale of the declining business.
In an 8K filing with the federal Securities and Exchange Commission on Monday (April 2), Acxiom said company executives Richard Erwin and Dennis Self would be eligible for a discretionary bonus in the event of a sale of Acxiom Marketing Solutions. The bonus would be on top of their current compensation arrangements.
“The incentive plan requires Messrs. Erwin and Self to respectively continue to be employed in their current positions by a buyer for a period of six months (unless involuntarily terminated by the buyer),” Acxiom stated in the SEC filing. “Payment of such bonus will be made over a period of up to twelve months after a closing.”
In the company’s most recent proxy filing, Ervin and Self have a base annual salary of $425,000 and were eligible to participate in the company’s annual cash bonus plan up to $276,250. Both executives also had restricted stock options worth nearly $721,000. According to Acxiom’s website, Irvin and Self now serve as co-presidents of the Marketing Solutions business.
Brief details of the incentive program were filed in the same SEC report announcing an extension of the company’s $500 million stock repurchase program. Acxiom’s publicly-issued news release on the stock buyback plan did not include information on executive bonuses for the speedy sale of the Marketing Solutions business.
Acxiom officials did not respond to Talk Business & Politics’ inquiries concerning details or the amount of the incentive bonus plan, or an impending sale of the Marketing Solutions business amid local media reports during the week of layoffs at the Arkansas company.
Acxiom has shifted major parts of its operations to Silicon Valley, although company officials have been mum on an exact count of its West Coast workforce compared to its offices in Little Rock, Conway and New York City. Acxiom’s last annual report reported just over 3,000 workers in the company’s global workforce.
The most recent SEC filing by Acxiom comes exactly two months after announced plans to realign its entire business into two distinct divisions — LiveRamp based in San Francisco, and Acxiom Marketing Solutions in Conway. At the time, Acxiom said it was also exploring options for that traditional marketing business following a comprehensive operations review by the company’s board of directors.
“The company announced … that it intends to actively explore options to further strengthen Acxiom Marketing Solutions and deliver greater value to its clients,” Acxiom CEO Scott Howe said on Feb. 6. “These options may include a strategic partnership, acquisition, tax-free merger, joint venture, tax-free spin-off, sale or other potential strategic combinations.”
Acxiom officials said then they would not provide further public comments on its strategic review unless there was a “material development” concerning that evaluation. The company has not yet provided details on how many Arkansas employees may be impacted by this realignment.
However, following an eventful week that began on April Fool’s Day, Acxiom shares lost nearly one-third of their value after social media conglomerate Facebook announced plans on March 28 to toss the publicly-traded Arkansas tech firm off its so-called “partners categories” program.
That program enabled third party data providers like Acxiom, Epsilon and Experian to targeting their advertising directly to consumers on Facebook. The Silicon Valley social media titan’s decision to part ways with Acxiom followed days of legal and political fallout from the company’s association with Cambridge Analytica, which is facing several lawsuits related to claims that it actively engaged in data mining and analysis for influencing the 2016 U.S. presidential election.
Acxiom attempted to reassure investors the Facebook deal would not impact fiscal 2017 earnings or upcoming 2018 financials, but the company’s shares have fallen from a yearly high of 52-week high of $32.93 to $22.90 at the close of business Friday. That sell-off represents a 30.5%, or $790 million loss in market based on the company’s 78.7 million shares outstanding, despite Acxiom’s attempt to prop up the stock with a $100 million increase in company’s buyback at the beginning of the week.
If Acxiom is successful is selling its Marketing Solutions business, most of the company’s operations would then be heavily focused on the East and West coasts. Nearly two years ago, Acxiom sold off its email marketing business to New York City-based Zeta Interactive, reducing its global workforce by 300 workers. Acxiom also sold its downtown Little Rock office tower to Simmons First of Pine Bluff a year ago, although some company employers still work at much smaller office in the city’s Creative Corridor.
Possible suitors will get their first look at the health of the marketing business in mid-May when Acxiom issues its fourth quarter and yearly earnings report on the realigned company. Wall Street expects the Little Rock company to report fourth quarter earnings of two cents per share on revenue of nearly $240 million, according to Thomson Reuters.