LONDON — Sotheby’s, the target of activist shareholder ire, has two new leaders at its helm — Tad Smith and Domenico De Sole — both of whom are taking over from William F. Ruprecht.
Smith will succeed Ruprecht as president and chief executive officer while De Sole, already an independent director, has been named chairman of the board. Sotheby’s said Monday that it had separated the roles of chairman and ceo.
Smith, 49, held a similar role at the Madison Square Garden Co., overseeing the overall strategy and day-to-day operations of the company’s sports, media and entertainment divisions.
He will take over at the publicly listed company on March 31. Ruprecht, who joined the auction house in 1980, had been president and ceo of Sotheby’s since 2000, and chairman since 2012.
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Ruprecht’s departure, which was revealed in November, and the new appointments come on the back of a sustained period of activist investors’ pressure on the firm, with complaints about poor financial performance and a lack of competitiveness.
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In 2013, investor Daniel Loeb of Third Point LLC — who now has a seat on the company’s board — wrote to Ruprecht, likening Sotheby’s to “an Old Master painting in desperate need of restoration,” and unfavorably comparing the auction house to its rival Christie’s.
In highlights of the letter published by The Wall Street Journal, Loeb accused Ruprecht of not fully grasping the importance of the modern and contemporary market, which he described as “highly problematic since these are the categories expanding most rapidly among new collectors.” Loeb also objected to Ruprecht’s 2012 compensation package of $6.3 million.
Following the criticism — and litigation between Sotheby’s and Third Point Capital over what the auction house judged to be a takeover threat — Third Point Capital eventually won three seats on the board in May 2014, and said Ruprecht would leave the firm the following November.
Last month, another of the auction house’s activist investors, Marcato Capital Management, wrote a letter charging the board and management with willful neglect, and said the firm offered poor returns on investment.
De Sole said Monday that Smith’s appointment was “the result of a thorough search process to identify an extraordinary leader to build on Sotheby’s strengths,” and that the board was unanimous in its view “that Tad is the ideal ceo for the company. He is a proven leader and value creator with ceo experience, strategic vision…and a track record of driving revenue and profit growth.”
Smith added: “I…look forward to tapping my experiences from related industries to help develop and implement Sotheby’s growth strategy, accelerate adoption of new technologies, allocate capital effectively and drive the creation of sustainable shareholder value in the coming years.”
De Sole is the chairman of Tom Ford International and the former president and ceo of Gucci Group, now part of Kering. He was named lead independent director of Sotheby’s in 2013. He is on the board of directors of companies including Gap Inc. and Telecom Italia.
As the former head of Gucci Group, he’s seen his share of angry shareholders — and action-packed annual general meetings. On his watch, Gucci fought off a hostile takeover bid by Bernard Arnault, and dealt regularly with gadfly Dutch shareholder groups — Gucci was then registered in the Netherlands — after the company found a white knight in PPR, now Kering.