Nearly six years of litigation were concluded in April of this year when the parties settled Plaintiffs’ claims concerning a board-approved agreement to pay the Company’s Chairman and CEO Robin Raina more than 25% of Ebix’s market capitalization upon a change of control.
An August 2018 trial had revealed that Raina appropriated Company resources to shape the agreement to his benefit and used deliberately false disclosures concerning his agreement to coerce the Company’s directors to accede to his desired terms. The evidence also showed that the Company’s directors aimed only to make Raina “happy,” regardless of the agreement’s cost, and that the directors had not considered whether the agreement would deter premium takeover offers, despite repeated disclosures that they had conducted such an analysis. Pursuant to the terms of the settlement, Ebix amended the change-of-control agreement to reduce the cost of Raina’s bonus by more than $215 million. Ebix additionally agreed to numerous governance reforms, including the hiring of an in-house general counsel and the development of a CEO succession plan, that will help protect the Company from future overreach by Raina.