The dramatic upheaval at media measurement and analytics provider Comscore has grown more complex in the two days since CEO Bryan Wiener and president Sarah Hofstetter announced their abrupt departures after less than one year with the company. The two previously served as executive chairman and chairwoman, respectively, at Dentsu-owned agency 360i.
All parties still agree, as stated when the news broke on Sunday evening, that the split concerned a disagreement between the company’s leadership and its board of directors over how to act on Wiener’s plan for growth in 2019. But two slightly divergent narratives have emerged as the parties both hired reputation management firms to represent them.
Yesterday, several law firms including the Law Offices of Howard G. Smith, Bragar Eagel & Squire, P.C., and Glancy Prongay & Murray LLP, which specialize in matters of securities fraud, also announced plans to launch their own investigations on behalf of Comscore investors “concerning the Company and its officers’ possible violations of federal securities laws.”
“Although the Board and Bryan were generally aligned on the company’s strategy, Bryan disagreed with the company regarding the execution of the strategy,” said a Comscore representative when asked about the “irreconcilable differences” Wiener mentioned in his resignation statement. “We thank Bryan for his contributions over the past year and wish him well in his future endeavors.”
The company then confirmed on the record that Wiener and Hofstetter initiated their own departures. At this point, however, it remains unclear when the decision was made. The latter executive appeared at last week’s 4A’s conference in Washington, D.C., on behalf of Comscore.
The PR firm representing the two departed executives referred Adweek to Comscore’s Feb. 28 earnings call for Q4 2018, in which Wiener said the company had “achieved what we set out to do in the second half of 2018 and are now in a position to continue our transformation.” He went on to lay out three specific areas in which the company should invest in 2019: a “technology transformation” that would “streamline and modernize our systems while lowering our operational costs beginning in 2020”; a “customer-centric product roadmap”; and a “new strategy for engaging brands and agencies” that would begin to pay off in the second half of this year.
When asked whether the disagreement that led to Wiener’s resignation concerned any of these points, a Comscore representative wrote, “We are not able to comment on the specifics; however, our strategy remains the same.”
The company also declined to comment when asked specifically whether its board has approved a budget for the first quarter of 2019.
Regarding the aforementioned securities investigation, the firms have called upon investors to join class actions in the interest of recovering damages, adding that they believe the company misled them by withholding information about its financial status.
“More specifically, the Law Offices of Howard G. Smith believes that the Company knew, but failed to timely disclose, that it would miss revenue guidance,” read one case summary, which also noted that the company’s stock price dropped “precipitously” when the news went live. That price is down approximately 30 percent since last week, and several analysts including Oppenheimer, SunTrust and Loop Capital downgraded the stock. These sorts of class-action motions are somewhat common in the wake of significant changes to a given company’s stock price, especially when following an incident such the shift in leadership that happened on Sunday.
On the recent earnings call, Wiener told investors that the sorts of transformations he sought to achieve are “not instantaneous,” noting that first quarter revenues for 2019 were “expected to be slightly below last year” due to “prior year execution issues.”
The Law Offices of Howard G. Smith and Bragar Eagel & Squire, P.C. have yet to respond to emails and voicemails; Glancy Prongay & Murray LLP declined to comment. Comscore declined to comment on the class-action announcements, the analyst’s decisions, and what role—if any—Wiener and Hofstetter played in selecting its board’s new members, who include longtime WPP executive Irwin Gotlieb along with SoFi CMO Joanne Bradford and Comscore director Kathi Love.
“We are excited about what our new board members bring to the table,” the Comscore representative wrote. “We expect to update the market on earnings in May.”
Last March, the company confirmed that it was under SEC investigation for matters related to allegations of “revenue recognition, internal controls, non-GAAP disclosures and whistleblower retaliation.” Wiener took over as CEO less than two months later.
The company’s 8-K form, filed on Sunday to alert investors regarding the leadership changes, includes more details of Wiener’s and Hofstetter’s departures. It revealed that Wiener will ultimately receive “a cash payment of $1,050,000, less applicable taxes and withholdings,” in addition to a $65,000 bonus for 2019 that is “subject to achievement of applicable performance goals” along with reimbursement for health insurance and legal fees and “accelerated vesting of 61,335 outstanding restricted stock units.”
Hofstetter will, in turn, receive $450,000 plus an additional $218,450 cash payment alongside a $42,000 performance bonus, the same reimbursed expenses and the vesting of 18,417 stock units. Comscore has not yet responded to a query regarding whether these totals are lower than those that the two executives agreed to in their initial contracts.
The company’s interim CEO Dale Fuller, a former executive in Apple’s business development department who also held top roles at software companies including McAfee, will earn a salary “equal to $25,000 per complete calendar week,” or $1.3 million per year, in addition to a $2,000 monthly cash payment and stock options determined by the number of weeks he spends in the job.
Fuller, who joined the Comscore board just over one year ago, may be best-known for developing early internet services like AngelFire, WhoWhere and Mailcity, in addition to overseeing major corporate restructuring moves like the ones he made to Apple’s struggling laptop division from 1987 to 1991.
Regarding new leadership, a company representative wrote, “Comscore’s nominating and governance committee has initiated a search to identify a permanent chief executive officer and will consider external and internal candidates.”