The Mario Cibelli And Shutterfly Battle

@mariocibelli and his Marathon Partners got a win at Shutterfly ($SFLY) earlier this year, but the real battle could just be getting started. Cibelli and another Marathon Partners’ nominee are joining the Shutterfly board. Shareholders also voted against executive pay (about 80% of shareholders voted against executive pay).

The big battle has been over compensation issues, so we’re still waiting on an overhaul here in terms of aligning management and shareholder interests. Marathon also has Ancora Advisors on its side [see its latest letter], who’s said that one of the new board members needs to be on the compensation committee.

But beyond that, you have to think that Shutterfly will look to grow its stock price in other ways. Shutterfly itself has been the focus on a buyout, where Silver Lake Partners was said to be kicking the tires, with the idea being to combine Shutterfly and Snapfish. The deal fell apart when HP sold Snapfish to District Photo. Now the thesis turns from being a buyout target to being an acquirer (think: Groovebook). Revenues and users are growing, the buyback has helped, but at this point it’s innovation that’s needed. The shortest path to that is acquisitions.