“Sotheby’s is like an old master painting in desperate need of restoration,” Mr. Loeb wrote. He also disclosed that he was the company’s biggest shareholder with a 9.3 percent stake. The letter and disclosure were in a filing with the Securities and Exchange Commission.

Mr. Loeb, who is a prominent art collector, is agitating for change at the top of Sotheby’s, contending that a “crisis of management” has created “dysfunctional divisions and a fractured culture.”

“As with any important restoration, Sotheby’s must first bring in the right technicians,” Mr. Loeb added. He wants to join the board immediately and recruit several new directors and a new chief executive. He also does not want the same person to be chairman and chief executive. [...] 

He then focused on Sotheby’s management. “Sotheby’s malaise is a result of a lack of leadership and strategic vision at its highest levels,” Mr. Loeb said.

He attacked Mr. Ruprecht’s pay package — $6.3 million in salary in 2012 — and limited stock holdings, adding that it had created a misalignment with other shareholders.

He also chastised Sotheby’s senior directors for an extravagant lunch and dinner at a notable “farm to table” New York restaurant, where he said “senior management feasted on organic delicacies and imbibed vintage wines at a cost to shareholders of multiple hundreds of thousands of dollars.”

Sotheby’s responded several hours later with a statement calling Mr. Loeb’s comments “incendiary and baseless,” and signaling it might not back down without a fight.