Special Situations Fund Engine Capital Seeks Board Changes at Lyft

Group 1 - Engine Capital, a special situations fund, aims to elect two candidates to Lyft's board to address governance and capital allocation issues, proposing a $750 million accelerated share repurchase program, elimination of the dual class share structure, and de-staggering the board [1][2] - Engine Capital criticizes Lyft's capital structure as "completely unoptimized," highlighting that co-founders with 2.3% ownership hold 30% voting power, and the staggered board structure hinders full board turnover [2] - Lyft's management emphasizes its focus on customer satisfaction and operational strength, reporting record gross bookings, adjusted EBITDA, and free cash flow in 2024 [3][4] Group 2 - Lyft's board unanimously recommends a vote for its director nominees and urges stockholders not to support Engine Capital's proxy card [4] - Lyft CEO David Risher asserts that the company is already implementing many of Engine's suggested actions, having initiated a $500 million share repurchase program and acquired FREENOW for European expansion [5][6] - Risher notes a 56% reduction in stock-based compensation since 2022 and the addition of directors with capital allocation expertise as part of Lyft's strategic improvements [6]