EBay Rejects Icahn’s Nominees for Its Board

The weekslong battle of words between eBay and Carl C. Icahn has heated up.

In releasing its preliminary proxy statement on Monday, eBay noted that it had rejected the billionaire’s two nominees for its board and instead chose to renominate every director up for re-election this year.

Shortly afterward, Mr. Icahn published his latest criticism of the company in a letter to fellow shareholders, accusing eBay’s chief executive, John J. Donahoe, of costing shareholders $4 billion through his handling of the sale of the online video chatting service Skype.

The escalation of hostilities makes eBay the biggest battleground for this year’s proxy fight season, as Mr. Icahn continues to demand that the technology giant spin off its PayPal payment processing unit. To press his attack, he has published a succession of criticisms in a variety of media - from his corporate blog to Twitter to TV appearances - centering on Mr. Donahoe and two of the company’s directors, Marc Andreessen and Scott Cook.

But eBay has been unmoved. The company has already released statements defending its chief executive and the two directors under attack, and Mr. Andreessen has written a series of blog posts to counter Mr. Icahn’s jabs.

Now eBay has said it plans to renominate all directors up for re-election, including Mr. Cook and Mr. Donahoe. Because the company has a staggered board until next year, only a portion of its directors are up for a shareholder vote.

“They demonstrate the caliber of leadership, business experience, insight and expertise that our company needs and that I believe our stockholders expect on our board,” Pierre M. Omidyar, eBay’s chairman, said in a statement.

And the company added that it had deemed Mr. Icahn’s two nominees - Daniel Ninivaggi, co-chief executive of the auto parts maker Federal-Mogul Corporation and a former chief executive of the billionaire’s firm, and Jonathan Christodoro, currently Mr. Icahn’s lieutenant - insufficiently qualified and too busy with seats on other boards.

Mr. Icahn, however, is not known for taking rejection lightly. In his latest public letter, he reiterated his arguments that eBay was wrong to sell a majority stake in Skype to an investor group that included Mr. Andreessen’s venture capital firm for $1.9 billion. Why wrong? Because the consortium later sold Skype to Microsoft for $8.5 billion roughly two years later.

The billionaire contended that Microsoft had been interested in buying Skype around the time that the investor consortium was negotiating for a majority stake, but was deterred by concerns over a legal fight between eBay and Skype’s founders. What Mr. Donahoe should have done, the blog post argues, was settle the litigation and then run a sales process.

“I believe that all stockholders must consider whether Donahoe is either incompetent or negligent or, perhaps even worse, was simply taking the easy path of bowing to the wishes of a respected and powerful board member,” Mr. Icahn wrote.

Mr. Andreessen has already defended his conduct, noting that he had disclosed his conflicts of interest and recused himself from all eBay board discussions about the first Skype transaction.

And in a statement on Monday, eBay defended the performance of Mr. Donahoe, pointing out that the company’s stock had risen 460 percent over the last five years.

“John’s track record of success at eBay, driving the company’s turnaround and growth, is well documented,” the company said in a statement. “Yet in pursuit of his own profit motives, Carl Icahn has made another unsubstantiated attack on John. Just like his previous ones, this attack is false and misleading and has already been utterly discredited by the facts.”