|Industry||Auctions, specialty retail|
|Founded||London, England (11 March 1744 )|
|Headquarters||1334 York Avenue|
New York City, USA
Number of locations
|80 locations in 40 countries (as of 2019)|
|Domenico De Sole|
Charles F. Stewart (CEO)
|Revenue||US$805.377 million (2016)|
|US$122.616 million (2016)|
|US$74.112 million (2016)|
|US$2.504 billion (2016)|
|US$505.602 million (2016)|
Number of employees
|1,617 (Dec 2016)|
|Divisions||Sotheby's New York|
Sotheby's Hong Kong
|Subsidiaries||Sotheby's Art Storage Facility|
Sotheby's Institute of Art
Sotheby's is a British-founded American multinational corporation headquartered in New York City. One of the world's largest brokers of fine and decorative art, jewelry, real estate, and collectibles, Sotheby's operation is divided into three segments: auction, finance, and dealer. The company's services range from corporate art services to private sales. It is named after one of its cofounders, John Sotheby.
Sotheby's is the world's fourth oldest auction house in continuous operation, with 80 locations in 40 countries. As of December 2011, the company had 1,446 employees worldwide. It is the world's largest art business, with global sales in 2011 totalling $5.8 billion.
Sotheby's was established on 11 March 1744 in London. The American holding company was initially incorporated in August 1983 in Michigan. In June 2006, Sotheby's Holdings, Inc. reincorporated in the State of Delaware and was renamed Sotheby's. In July 2016, Chinese insurance company Taikang Life became Sotheby's largest shareholder. Sotheby's maintains a significant presence in the UK, and its UK operation is headed by Lord Dalmeny.
Sotheby's predecessor, Baker and Leigh, was founded in London on 11 March 1744, when Samuel Baker presided over the disposal of "several hundred scarce and valuable" books from the library of The Rt Hon Sir John Stanley Bt., of Alderley. Three Swedish auction houses are even older (Stockholms Auktionsverk, Göteborgs Auktionsverk, Uppsala auktionskammare) and Sotheby's great rival in London and then New York, Christie's, dates from 1759 or shortly after. The current business dates back to 1804, when two of the partners of the original business (George Leigh and John Sotheby) left to set up their own book dealership. The library Napoleon took with him into exile at St Helena, as well as the library collections of John Wilkes, Benjamin Heywood Bright and the Dukes of Devonshire and of Buckingham (both related to George Leigh) were sold through Samuel Baker's auctions.
After Baker's death in 1778, his estate was divided between Leigh and John Sotheby. George Leigh died unmarried in 1816, but not before endeavouring to secure his succession by recruiting Samuel E Leigh into the business. Under the Sotheby family, the auction house extended its activities to auctioning prints, medals, and coins. John Wilkinson, Sotheby's Senior Accountant, became the company's new CEO. The business did not seek to auction fine arts in general until much later, their first major success in this field being the sale of a Frans Hals painting for nine thousand guineas as late as 1913.
In 1917, Sotheby's relocated from 13 Wellington Street to 34-35 New Bond Street, which remains as its London base to this day. They soon came to rival Christie's as leaders of the London auction market, which had become the most important for art. In 1955, Sotheby's opened an office at Bowling Green, New York City. In 1964, Sotheby's purchased Parke-Bernet, then the largest auctioneer of fine art in the United States. In the following year, Sotheby's moved to 980 Madison Avenue, New York. With international popularity of fine art auction growing, Sotheby's opened offices in Paris and Los Angeles in 1967, became the first auction house to operate in Hong Kong in 1973, and Moscow in 1988.
Sotheby's became a UK public company in 1977. A 25 percent drop from the 1980-81 record of $610 million in sales contributed to Sotheby's decision to relocate its North American headquarters from Madison Avenue to a former cigar factory at 1334 York Avenue, New York, in 1982. The auction house closed its Madison Avenue galleries at East 76th Street. The Los Angeles galleries were sold and auctions of West Coast material moved to New York.
In the following year, a group of investors (such as American millionaire Alfred Taubman) purchased and privatized Sotheby's. Sotheby's was initially incorporated as Sotheby's Holdings, Inc. in Michigan in August 1983. Taubman took Sotheby's public in 1988, listing the company's shares on the New York Stock Exchange, making Sotheby's the oldest publicly traded company on the NYSE under the ticker symbol "BID." In June 2006, Sotheby's Holdings, Inc. reincorporated in the State of Delaware and was renamed Sotheby's shortly after.
With private transactions constituting an essential and increasingly profitable business segment, through the years Sotheby's has bought art galleries and helped dealers finance purchases. It has also gone into partnership with dealers on private sales. In 1990, Sotheby's teamed up with dealer William Acquavella, to form Acquavella Modern Art, a Nevada general partnership and a subsidiary of Sotheby's Holding Company. The subsidiary paid $143 million for the contents of the Pierre Matisse Gallery in Manhattan, which included about 2,300 works by such artists as Miró, Jean Dubuffet, Alberto Giacometti, and Marc Chagall, and began selling the works both at auction and privately. In 1996, Sotheby's acquired Andre Emmerich Gallery to operate a division called Emmerich/Sotheby's, and in 1997 it purchased a 50% interest in Deitch Projects. As a consequence, the Josef and Anni Albers Foundation, the main beneficiary of the artists' estates, as well as the estates of Morris Louis and Milton Avery announced that they would not renew their Emmerich contracts. That decision came right after it was disclosed that Sotheby's had decided to close Emmerich's prime space at 41 East 57th Street, and that its artists would be handled out of Deitch Projects. Sotheby's subsequently closed Andre Emmerich in 1998 and later sold its share in Deitch Projects back to Jeffrey Deitch. In 2006, Sotheby's acquired a Dutch dealership, Noortman Master Paintings, from its owner, Robert Noortman, for $82.5 million ($56.5 million worth of Sotheby's stock and assumption of more than $26 million in gallery debt, including $11.7 million owed to the auction house). Sotheby's and Noortman had collaborated before in 1995, when the sales of Dutch plastic millionaire Joost Ritman were divided between the two companies.
Already in 1990, Sotheby's New York had successfully lobbied for a zoning change permitting the construction of a 27-story residential tower above the five-story headquarters; this expansion was never realised. Instead, Sotheby's throughout the 1990s expressed interest in sites that ranged from the old Alexander's building on East 59th Street to the New York Coliseum site on Columbus Circle, and was even considering moving into the old B. Altman building on Fifth Avenue. The company eventually bought its York Avenue building for $11 million in 2000 and completed a $140 million expansion and renovation in 2001, adding six floors and 240,000 square feet. The renovation added the capability to store works on the same premises as the specialist departments, galleries, and auction spaces. Sotheby's New York's offices also house Sotheby's Wine and the former Bid (an American contemporary restaurant and later bistro), which was closed due to poor attendance. The company sold the building in 2002 for $175 million. In May 2007, Sotheby's opened an office in Moscow in response to rapidly growing interest among Russian buyers in the international art market and held sales in Qatar in 2009.
As many industries took a blow from the economic crisis of 2008, the art market also saw a contraction. In international figures, art prices fell by 7.5% in Q1 of 2008 in comparison to the previous quarter. In September and October 2008, major auction houses saw a sharp decline in sales: artprice.com, the world leader in art market information, coined the term "Black October." Sotheby's bought-in rate was 27%, Christie's was 45% and Phillips de Pury's was 46%. However, the total values of global and United States Fine Art auction sales were US$8.3 billion and US$2.9 billion, respectively. In 2009, art collector Steven A. Cohen built a 6 percent stake in the auction house for his hedge fund SAC Capital Advisors.
As of 2012, the firm has an annual revenue of approximately US$831.8 million and offices on Manhattan's York Avenue and London's New Bond Street. This position has been achieved through natural growth, acquisitions (most notably the 1964 purchase of the United States' largest auctioneer of fine art, Parke-Bernet), and management during the cyclical "art recessions" of the 20th century.
In 2011, Noortman's Amsterdam space was closed and the gallery moved to London. Two years later, Sotheby's closed Noortmans, after having written down $8.3 million of inventory and started selling off lower-valued works of art through other auction houses. As of 2011, Sotheby's is present in over 90 locations in 40 countries with ten salesrooms. In 2012, the company signed a 10-year joint-venture agreement to form Sotheby's (Beijing) Auction Co. Ltd., the first international auction house in China; under the agreement, it invested $1.2 million to take an 80 percent stake in the venture with state-owned Beijing Gehua Cultural Development Group.
Sotheby's shares a rivalry with Christie's for the position of the world's preeminent fine art auctioneer, a title of much subjectivity. In August 2004, Sotheby's introduced an online system - MySotheby's - allowing clients to track lots and create "wishlists" that could be automatically updated as new works became available. Sotheby's also created the BIDnow service, which allows bidders to bid real-time online while watching the broadcast auctions, with the exception of Wine auctions. LiveBid is Sotheby's online bidding system exclusively for wine auctions. In the meantime, income from classic auctioneering has fallen, as Sotheby's reported a decrease of 42% in net income in the first half of 2012.
As well as numerous high-profile real life auctions being held at Sotheby's, the auctioneers has also been used in various films, including the 1983 James Bond film Octopussy in which Bond (played by Roger Moore) unsuccessfully tried to bid for a rare Fabergé egg, which he had cleverly exchanged for a fake that was finally sold to the villainous Afghan prince, Kamal Khan (Louis Jourdan).
On 17 March 2015, it was announced that Tad Smith, former president and chief executive of New York's Madison Square Garden, would succeed William F. Ruprecht as CEO of Sotheby's. Smith had no experience in the auction industry and oversaw a doubling of profits during his time at Madison Square Garden. In 2015 the auction house's longest serving auctioneer, David Redden, and Vice-Chairman retired.
On 25 January 2018, Sotheby's acquired AI company Thread Genius for an undisclosed amount.
In 2019, Sotheby's announced a redesign and expansion of its New York headquarters on the Upper East Side that is being led by the designer Shohei Shigematsu of the Office for Metropolitan Architecture (OMA). The exhibition space there will grow to over 90,000 square feet from 67,000, and the project will include the addition of several new galleries.
Sotheby's auctions are usually held during the day. The majority are free and open to the public, with the exception of occasional evening auctions, which require tickets. Attendees have no obligation to bid.
Bidding finishes when only one bidder remains willing to purchase the lot at the bidder's declared price. The auctioneer "knocks down" the lot, declaring it sold to the winning bidder. The winning bid for a lot is also called the hammer price. Sotheby's organises the delivery of the lot in private with the buyer.
Buyers can find out what is for sale at Sotheby's by browsing e-catalogues, visiting pre-sale exhibitions, purchasing print catalogues and registering for e-mail alerts. Buyers can register to bid in person at Sotheby's offices, or online. Sotheby's requires that prospective buyers provide government-issued proof of identity and sometimes a bank reference. There are four ways buyers can bid: in person at the auction rooms, by telephone, bid live online or make an absentee bid online. When a bid is successful, Sotheby's calculates and sums the hammer price, the buyer's premium and taxes.
Sellers are required to submit an Auction Estimate Form, providing thorough information and a photograph of the item. Once accepted for auction, the seller and Sotheby's sign a contract, which sets out the reserve price and the seller's commission. If bidding on a seller's lot does not reach the reserve price, the item is not sold.
Sotheby's links sellers with prospective buyers in private if sellers do not want a public auction. The identities of buyers and consignors are not disclosed. Sotheby's Private Sales works with clients with confidentiality and tailors the buying and selling process in a private setting. Private Sales accounted for 16.5% of all Sotheby's sales in 2011. That year, Sotheby's inaugurated a new gallery space called S2 at its York Avenue headquarters with a show of work by American abstract painter Sam Francis. Unlike Haunch of Venison, a gallery that Christie's bought in 2007, S2 is solely devoted to showcasing the auction house's private sales. The company reported $513 million in private sales in the first half of 2012, making commission revenues of $41.5 million on them. In 2013, Sotheby's opened a gallery for private sales close to its branch in London, in a five-story block at 31 George Street. The auction house also conducts private sales through its selling exhibitions of monumental sculpture at Chatsworth House, Derbyshire, and at the Singapore Botanic Gardens.
Established in 1988, Sotheby's Financial Services offers loans for consigned property and loans against the value of client's items through customized terms. The auction house also makes term loans, for a defined period of time, on works that clients aren't planning to sell, in part to "establish or enhance mutually beneficial relationships with borrowers" that can lead to future consignments. Despite criticism from the media and dealers that it operates like a bank by inflating prices back in the 1990s, its loan portfolio amounted to about US$212 million in 2011. While traditional lenders such as banks provide loans at a lower cost to borrowers, Sotheby's said in its 2011 annual report, few will accept works of art as the sole collateral.
Sotheby's Corporate Art Services specialises in assisting corporations in various processes to build and value their corporate art collections. Sotheby's assists handling acquisitions, deaccessions, valuations and plans special events related to artwork for corporate clients. Sotheby's has worked with companies such as AT&T, Bank of America, CBS, Citigroup, Coca-Cola, Credit Suisse, HSBC, MetLife, Merrill Lynch, Neuberger Berman, PNC Bank, and Unilever. For example, in 2010, Sotheby's auctioned works from the Neuberger Berman and Lehman Brothers Corporate Art Collections when the corporations were under financial distress.
In 2016, Sotheby's acquired Art Agency, Partners for $85 million. Art Agency, Partners provides guidance and advisory services to art collectors, assists artists with legacy planning, plans independent curatorial projects, and produces a podcast and articles through their editorial project called In Other Words.
iCollect was formerly Sotheby's collection management system powered by Collector Systems, a web-based collection management software creator.[better source needed] iCollect provides a compilation of Sotheby's entire collection of items ever sold, detailed information about each item and track condition history. After registration, clients can upload images of their items and provide condition reports, appraisal documents and insurance certificates.
Sotheby's Picture Library contains images in a variety of formats available for licensing. It is one of the image suppliers to various databases such as the British Association of Picture Libraries and Agencies (BAPLA).
Sotheby's Museum Services works with museums through providing assistance in item valuations, deaccessions and sales, tailored acquisition opportunities and cultivation and development opportunities.
Sotheby's Café is located in Sotheby's Bond Street auction house in London.
Sotheby's Tax & Heritage assists fiscal and legal aspects of items handled by Sotheby's in the United Kingdom and Europe.
Sotheby's Trusts & Estates service assists fiduciaries, executors and beneficiaries in the United States for valuation and disposition of personal property assets, estate tax, family division, insurance loans, collateral loans, and consignment management. Clients are not restricted to sell at Sotheby's.
Sotheby's Valuations service provides valuations of the market, charitable donations, insurance for loans, indemnification valuations for government applications and auction estimates.
Sotheby's publishes Sotheby's at Auction, a magazine highlighting rare works of art on the market. Periodicals are priced at US$20 per issue in the United States and Canada. In October 2019, Sotheby's launched Sotheby's Own Label Collection, a line of a dozen wines. The project took two years to complete, and is based on Sotheby's best-selling wines--both represented in-store and on its e-commerce platform. Additionally, the collection reflects some of the long-standing relationships Sotheby's has with producers around the world.
The Sotheby's Prize, launched in 2017, is a $250,000 annual award given to museums that exhibit what are vaguely described as "groundbreaking shows". The inaugural winners were Many Tongues: Art, Language and Revolution in the Middle East and South Asia curated by Omer Kholeif of the Museum of Contemporary Art in Chicago and Pop América: Contesting Freedom, 1965-1975 curated by Esther Gabara of the Nasher Museum.
In 1969, Sotheby's founded Sotheby's Institute of Art in London. Initially, the Institute served as a training program for auction house employees and provided lessons in connoisseurship. Sotheby's Institute of Art is now the institution of higher education devoted to the study of art and its markets with campuses in London (UK), New York and Los Angeles (USA). The Institute offers full-time accredited master's degrees as well as a range of postgraduate certificates, summer, semester and online courses, public programmes and executive education. Master's degrees are offered in:
Sotheby's has set, then later reset, a number of world records for auctioned works of art. The following monetary values are given in United States dollars.
In February 2000, A. Alfred Taubman and Diana (Dede) Brooks, the CEO of the company, stepped down amidst a price fixing scandal. The FBI had been investigating auction practices in which it was revealed that collusion involving commission fixing between Christie's and Sotheby's was occurring. In October 2000, Brooks admitted her guilt in hopes of receiving a reduced sentence, implicating Taubman. In December 2001, jurors in a high-profile New York City courtroom found Taubman guilty of conspiracy. He served ten months of a one-year sentence in prison, while Brooks received a six-month home confinement and a penalty of US$350,000. Sotheby's was sentenced to pay a fine of US$45 million. No staff from Christie's were charged.
Growing out of the four-year criminal antitrust investigation by the United States Department of Justice, some 130,000 buyers and sellers filed class-action lawsuit, arguing they were cheated in the price-fixing conspiracy by Sotheby's and Christie's. In 2001, the United States District Court for the Southern District of New York gave final approval to a US$512 million agreement. The structure of the settlement was said to have helped stave off insolvency for both companies, especially the publicly held Sotheby's.
In 1997, a Channel 4 Dispatches programme alleged that Sotheby's had been trading in antiquities with no published provenance, and that the organisation continued to use dealers involved in the smuggling of artefacts. As a result of this exposé, Sotheby's commissioned their own report into illegal antiquities, and made assurances that only legal items with published provenance would be traded in the future. In 2012, however, the U.S. Immigration and Customs Enforcement moved to seize a 10th-century Cambodian sandstone statue from Sotheby's, alleging in a civil complaint before the United States District Court for the Southern District of New York that the company had put the work up for auction "despite knowing that it had been stolen from a temple" in Koh Ker. The Antiquities department in London was managed by Felicity Nicholson, Brendan Lynch and Oliver Forge, Forge and Lynch were removed from their posts but never charged in their role. In a recent article, October 2014, The Australian, by Michaela Boland explored Brendan Lynch's relationship and dealing in Antiquities.
In 2012, art dealer Marc Jancou filed suit in the Supreme Court of the State of New York, suing both Sotheby's and artist Cady Noland after the auction house pulled a work he had consigned by the artist from a sale, apparently at her request. The suit argued that this presented a breach of the consignment agreement. Noland had told Sotheby's there were problems with the condition of her painting Cowboys Milking (1990), estimated to sell for between US$260,000 and $350,000. Jancou sued Sotheby's for US$6 million in compensatory damages, and Noland for US$20 million in punitive damages. Both Sotheby's and Noland argued withdrawing the work from auction was well within the artist's rights under the Visual Artists Rights Act (VARA) and New York's Artists' Authorship Rights Act (AARA).
In 2016, three New York art traders - Warren Adelson, president of Adelson Galleries, as well as New York-based art dealers Alexander Parish and Robert Simon - planned to sue Sotheby's for alleged fraud over the resale of Leonardo da Vinci's Salvator Mundi, which they sold through Sotheby's in 2013 for $80 million. After learning that the buyer of the painting, Swiss art dealer Yves Bouvier, sold it on to Russian billionaire Dmitry Rybolovlev for $127.5 million, the traders felt deceived by the auction house as to the painting's true value. According to court papers, the traders inquired whether Sotheby's knew the art work could have been sold for more, and whether they were "misled into selling the work for a smaller amount by Sotheby's because Bouvier is an esteemed client." The auction house has denied knowing that Rybolovlev was the intended buyer, and sought to dismiss the lawsuit pre-emptively.
In a related development, Rybolovev sued Sotheby's for $380 million in damages for this alleged collusion with Yves Bouvier in 2018, claiming the company "materially assisted the largest art fraud in history", due to Sotheby's vice chairman of private sales worldwide writing "bullish assessments, which Bouvier forwarded to Rybolovlev's team, about some of the same artworks that Bouvier bought privately through Sotheby's and flipped to the Russian at higher prices." Sotheby's dismissed these allegations as "entirely without merit" and stated it would seek to have the case thrown out.
However, on 25 June 2019, a US federal court denied Sotheby's request to have the case dismissed, arguing that "although there is parallel litigation ongoing in Switzerland, Sotheby's fails to establish that there are 'exceptional circumstances' justifying dismissal." The court also issued an order for Sotheby's to submit all previously confidential information relating to the litigation and rejected the auction house's request to redact specific details from court documents. In a statement, Sotheby's called the court decision "disappointing" and stated it would "vigorously litigate the merits of the case in Switzerland and New York."
Sotheby's London auction house had outsourced its cleaning and other support services to Contract Cleaning and Maintenance (London) Limited (CCML). In early 2015, the UVW union initiated a formal trade dispute over low pay, insufficient sick pay, and issues summarised in an Early Day Motion signed by 24 Members of Parliament, highlighting:
the unwarranted suspension of a porter following a grievance he made about poor treatment, the refusal to stop using certain chemicals which leave cleaners with breathing difficulties, chest pains and rashes, the unwarranted deduction of wages and working hours, overworking and shouting at porters and cleaners, reprimanding a porter for using the toilet outside his official break time, threatening a cleaner with suspension for not being clean shaven
After CCML conceded the majority of UVW's demands, Sotheby's decided to contract all support services to a new company, Servest. This backfired when UVW staged a noisy, sit-down protest outside the Sotheby's entrance while clients arrived for a record-breaking summer night of contemporary art auctions, including lots by Andy Warhol and Francis Bacon. Four workers were suspended and investigated for their involvement in the protest, which led to another Early Day Motion signed by 42 MPs, condemning:
that Sotheby's and Servest consider peaceful protest to be an act of misconduct; further condemns Sotheby's decision to ban from the site cleaners and porters who took part in a lawful, peaceful protest to call for a real Living Wage, contractual sick pay and an end to trade union victimisation
With only two of the four workers reinstated, another UVW protest disrupted a Sotheby's classic car auction in London's Battersea. In February 2016 it was announced that Sotheby's and Servest had reached an agreement to pay all outsourced workers the London Living Wage and improved sick pay.
In 2013 and 2014, Sotheby's was the target of a takeover attempt by activist investor Daniel S. Loeb of Third Point LLC, a registered investment adviser founded in 1995 and headquartered in New York with over $14 billion in assets under management. Third Point began acquiring shares in Sotheby's in February 2013. By July 2013, Loeb's stake in Sotheby's increased to 3.7%, and in August he raised his stake to 5.7%, and requested to talk with the management and board. In July, activists at Marcato Capital Management revealed a 6.6% stake, saying that the shares were undervalued. At that point, Marcato and Third Point were Sotheby's second and third-largest shareholders, following BlackRock Fund Advisors. Third Point's August purchase brought its stake in Sotheby's to 3.9 million shares.
On 2 October, Third Point increased its share of Sotheby's to 9.3 percent and, in a letter to Sotheby's President, CEO, and Chairman William F. Ruprecht, called for a change in management, due to "the company's chronically weak operating margins and deteriorating competitive position relative to Christie's, as evidenced by each of the contemporary and modern art evening sales over the last several years." Third Point noted "We acknowledge that Sotheby's is a luxury brand, but there appears to be some confusion - this does not entitle senior management to live a life of luxury at the expense of shareholders." Criticising Sotheby's "for what he called an incoherent Internet strategy and for not being aggressive enough in the contemporary art market", Loeb said that he wanted the firm to expand globally and "exploit the Sotheby's brand through adjacent businesses" and offered to "join the Board immediately and to help recruit several new directors who have experience increasing shareholder value, share a passion for art, understand technology and luxury brands, or have operated top-performing sales organizations."
On 3 October 2013, Sotheby's responded to Third Point's rapid accumulation of Sotheby's stock by announcing its adoption of a shareholder rights plan, known generally as a "poison pill", whereby it forcibly diluted investor holdings in an attempt to ward off a hostile takeover. Third Point described the action as "a disproportionate response" and "a relic from the 1980s", saying: "Rather than address our well-documented citations of mismanagement and initiate a constructive dialogue with its largest shareholder, the Board and the CEO have attempted to further entrench themselves," putting "their job security ahead of shareholders." Third Point wrote that "no action could have revealed more clearly the need for new blood and fresh views in the boardroom at this critical inflection point" for Sotheby's.
Between October 2013 and February 2014, representatives of Sotheby's and Third Point "held a number of in-person and telephonic meetings" in which "they discussed Third Point's ideas about how to increase stockholder value." At these meetings, Third Point insisted on multiple seats on Sotheby's board; the firm offered only a single seat for Loeb himself. In Third Point's view, this offer did not represent "a serious attempt to forge a settlement that would avoid a proxy contest."
In February 2014, Third Point, which by now was Sotheby's largest stockholder, stated in a filing that it would nominate three people - Loeb, Harry Wilson, and Olivier Reza - to Sotheby's board, saying that current board members "lack the fresh perspective necessary to overhaul the company's challenged operational structure and cure its cultural malaise." Informing Sotheby's formally on 27 February 2014, of its nomination of Loeb, Wilson, and Reza as board candidates, Third Point commended Sotheby's for having taken certain actions that Third Point considered productive, but stated that "there remains much to be done to enhance" the firm's "competitive position, refocus its strategy, and boost stockholder value." It was reported in early March that Marcato would support Third Point's nominees to the board.
On 13 March, a day after Third Point increased its stake in Sotheby's slightly to 9.6%, the firm rejected Third Point's board nominees, saying that they "add no relevant skills, experience or expertise that is not already effectively represented on the board." Instead, the firm nominated executive Jessica Bibliowicz and former AOL and Univision executive Kevin Conroy. This proposed board, complained Third Point, "lacks an expert in the type of fundamental corporate restructuring that the Company must undertake."
On 24 April 2014, the investor shareholder advisory firm Institutional Shareholder Services recommended that Sotheby's investors should vote for two of the three board members recommended by Daniel Loeb, including himself. The second board member recommended by the ISS was Olivier Reza, "a former investment banker whose jeweler family has done business with Sotheby's."
Prior to the ISS recommendation, on 21 April 2014, Mr. Loeb wrote a letter to the Sotheby's board noting the following:
We are convinced that having an owner's perspective in the boardroom yields better results, that this board is in dire need of fresh insights, and that our candidates are more qualified than the company's emissaries we are seeking to replace.
In the report the ISS noted that, "the particulars of their criticisms of things like commission margin, there is credible reason to believe their larger criticism about strategic myopia has some credibility". ISS recommended shareholders vote for Loeb and Olivier Reza and that introducing change into the boardroom was warranted. Writing for The New York Times on 24 April, of 2014, Alexandria Stevenson notes:
Mr. Loeb has accused Sotheby's of rebating the fees its takes for selling multimillion-dollar works, while also taking less of the buyer's fees to attract more business. He has taken issue with the auction house's strategy of focusing on top clients and headline sales. He has even criticized board members' relatively low holdings of their own company's stock.
Later that day, Sotheby's issued a statement in regards to the report by the ISS:
We believe that Sotheby's shareholders should vote for all of Sotheby's director nominees. We note that ISS rejected one of Third Point's nominees and recommends that shareholders vote for our Say on Pay proposal.
On 5 May, Dan Loeb and Sotheby's reached an agreement which stipulated that Dan Loeb, Olivier Reza and Harry J. Wilson joined the board in exchange for Third Point having an ownership cap at 15%, William Ruprecht would stay as CEO and the proxy context to be held at Sotheby's AGM would cease On the newest board members, Bill Ruprecht, Chairman, President and CEO of Sotheby's noted:
We welcome our newest directors to the Board and look forward to working with them, confident that we share the common goal of delivering the greatest value to Sotheby's clients and shareholders. This agreement ensures that our focus is on the business and that we will benefit from five fresh voices and viewpoints.
Disclosed on 27 July 2016, Chinese insurance company Taikang Life Insurance (Chinese: ), run by Chen Dongsheng, the grandson-in-law of Mao Zedong, has taken 13.5% stake in Sotheby's, therefore holds the highest active stake of the auction house, at the same time announced the possibility of seeking board representation in the near future.
Sotheby's delists from the London Stock Exchange