CarMax said on Thursday that it will add Bill Cobb and Jim Kessler to its board of directors in connection with the company's 2026 annual shareholder meeting. The announcement follows discussions with activist investor Starboard Value, which had disclosed a stake in CarMax last month and put forward director nominations.
Starboard had nominated Bill Cobb and its founder and CEO, Jeff Smith, to CarMax's board. In tandem with those nominations, the activist investor pressed the used-car retailer to make changes across several operational fronts, calling for improvements to its digital customer experience, cost reductions and a revision of its pricing structure.
After further talks between Starboard and CarMax, the company said it plans to appoint Cobb and Jim Kessler to its board. In response to that planned slate of appointments, Starboard agreed to withdraw its own director nominations for the upcoming annual meeting.
CarMax's management highlighted the experience the incoming directors are expected to bring. The company said the additions will contribute auto industry and consumer expertise to the board, commenting on the fit between the new members and the retailer's strategic priorities.
"We are confident that the refreshed Board in conjunction with Keith as CarMax’s new CEO can drive substantial value creation," Smith said.
The move resolves the immediate proxy contest between the company and the activist investor by replacing Starboard's nominations with a company-backed set of board appointments that include at least one individual Starboard had proposed. The agreement leaves in place the areas Starboard emphasized as needing attention: digital customer experience enhancements, cost discipline and a review of pricing practices.
This development comes as CarMax prepares for its 2026 shareholder meeting, where corporate governance and strategic direction will remain focal points for investors and management alike. The company and the activist have signaled a willingness to settle the dispute through board changes rather than a contested vote.
Context and next steps
The planned board additions and withdrawal of Starboard's nominations settle the most immediate governance dispute described by the parties. Implementation of the operational changes Starboard advocated - including digital upgrades, cost reductions and pricing adjustments - was highlighted by the activist as part of its case for board change; how those initiatives will be carried out and their ultimate effect were not detailed in CarMax's announcement.