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January 7, 2016

Major Yahoo Investor Demands Leadership Change

Image by Sebastian Bergmann.

Activist investor Starboard Value LP is continuing to call for Yahoo CEO Marissa Mayer’s proverbial head on a platter.

Starboard penned a letter to the company’s board of directors demanding Mayer and her top executives — although no names were actually mentioned — get the old heave ho.

Starboard — Yahoo’s largest investor — did not stop there, however. It is threatening the board with a proxy fight if the directors do not do its bidding.

Marissa Mayer

Marissa Mayer

Essentially, that means if the board does not fire Mayer and her top executives, Starboard will push for a public shareholder vote that could potentially see directors of the board get the boot too.

“It appears that investors have lost all confidence in management,” Starboard CEO Jeffrey Smith wrote.

“Dramatically different thinking is required, together with significant changes across all aspects of the business starting at the board level, and including executive leadership.”

Spokeswoman Rebecca Neufeld told Reuters Yahoo will go public with more details on its turnaround plan when it posts its fourth quarter earnings call later this month.

“Our board and management team engage in and maintain regular, open dialogue with all our shareholders, and consistently strive to deliver and to maximize shareholder value,” Neufeld said.

Starboard, which owns 0.75 percent of Yahoo, has long been known as the loudest voice in the room when it comes to its investments.

Starboard first began taking Mayer to task back in 2014 when it penned a letter urging Yahoo to sell off its display advertising and search components rather than its stake in the Alibaba Group Holdings Ltd. The letter said many investors were losing faith in the plans laid by Mayer in her goal of making Yahoo a feasible entity once again.

Another shareholder, Eric Jackson, who is the managing director of the New York hedge fund Ader Investment Management, openly criticized Mayer back in November.

“The company and the shareholders would be better served with her leaving,” he told CBS.

Board chairman Maynard Webb said last month that the board planned to stand behind Mayer and her team.

The board has compete confidence in the management team and leadership of Yahoo,” Webb said.

When asked directly in an interview with CNBC if Mayer’s position was safe, Webb was emphatic: “I’ve never met anybody who works harder, is smarter and cares more,” he said. “We want to help her return this company to an iconic place where it belongs.”


Jennifer Cowan is the Managing Editor for SiteProNews.