The Wall Street Journal-20080213-Two New York Times Directors to Depart

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Two New York Times Directors to Depart

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Two high-profile New York Times Co. directors are stepping down, even as an outside shareholder group is questioning the quality of the board and putting forward its own candidates for election.

The Times said James Kilts, 60 years old, a former chief executive of Gillette Co. and now a partner of investment-banking firm Centerview Partners LLC, and Sara Lee Corp. CEO Brenda Barnes, 54, won't stand for re-election when their terms expire this spring. Times spokeswoman Catherine Mathis said Mr. Kilts and Ms. Barnes were leaving because they both "have significant outside commitments that would make it difficult for them to put in the time."

Mr. Kilts had told the board some time ago that he needed to cut back on his outside engagements so he could focus on his role as the head of the private-equity arm of Centerview Partners, a boutique banking firm, according to people familiar with the matter. Neither Mr. Kilts nor Ms. Barnes returned calls seeking comment.

The Times said it is nominating Robert Denham, 62, a partner at law firm Munger Tolles & Olson LLP and former CEO of Salomon Inc.; and Dawn Lepore, 53, CEO and chairman of Drugstore.com Inc. Shareholders will vote on the nominations at the annual meeting April 22.

The departure of Mr. Kilts is a particular blow for the Times. He had been a major voice pushing for change on the board, according to people familiar with the matter. The Times is under growing pressure to take radical action to deal with its falling stock price and troubles in its business.

"Mr. Kilts has been a very valuable board member who has participated in the board's extensive reviews of our business and supported all the actions taken by the entire board over the past two years," Ms. Mathis said. "We have very deep and strategic expertise on the board, which will be further strengthened by the two outstanding nominees announced today."

The performance of the board has been put in the spotlight by a proxy campaign begun late last month by hedge funds Harbinger Capital Partners and Firebrand Partners LLC for seats on the company's board. Firebrand chief Scott Galloway, one of the nominees, said in a letter sent to the Times last month that the current board has been ineffective in inspiring the "requisite bold action that this media environment demands."

A Firebrand spokesman said the firm was "gratified that our efforts appear to be yielding fruit at the board level. Shareholders are now faced with a clear decision: to support directors handpicked by the current board, or truly independent directors put forward by a large shareholder already catalyzing change at the New York Times."

The board retains several other business heavyweights, including former Bertelsmann AG CEO Thomas Middelhoff and Verizon Communications Inc. finance chief Doreen Toben.

Ms. Lepore is a board member of online-auction company eBay Inc., and a former Wal-Mart Stores Inc. board member. She also is a former vice chairman of Charles Schwab Corp. Her digital experience is "highly relevant" to the Times, Ms. Mathis said. This would address what one person familiar with Firebrand's thinking said was the fund's desire for the Times to expand its digital revenue opportunities.

Mr. Denham is on the board of Alcatel-Lucent SA, Chevron Corp., Wesco Financial Corp. and Fomento Economico Mexicano S.A.B. de C.V.