Activist Ancora threatens another proxy fight at Shutterfly

Ancora's escalation of pressure on Shutterfly comes after another activist investor, Marathon Partners, won two board seats in a proxy battle with the company at its annual meeting this year.

In the letter, addressed to company Chairman Philip Marineau, Ancora says that Shutterfly has not addressed three key concerns that shareholders have previously voiced: corporate strategy, capital allocation and compensation.

Ancora had an 0.28 percent stake in Shutterfly as of the end of June.

"If the board is unwilling to implement meaningful changes to its current corporate strategy, capital allocation plans, and compensation policies, then we believe another active proxy season is inevitable come 2016," Ancora said in a letter distributed on Tuesday.

Shutterfly shares have fallen 8 percent year to date.

The company was not immediately available to comment.

(Reporting by Michael Flaherty; Editing by Christian Plumb)