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February 7, 2012 9:51 pm
Yahoo’s chairman, Roy Bostock, and three other directors are to step down as part of a boardroom clear-out, marking the latest attempt to win back investor confidence as the US internet company pursues a change in strategic direction.
Mr Bostock announced the board-level changes, which include two new independent directors, in a letter to shareholders on Tuesday. Also stepping down at this year’s annual meeting will be Vyomesh Joshi, Arthur Kern and Gary Wilson. Mr Bostock added that Maynard Webb, a former number two at Ebay, and Alfred Amoroso, who once served on IBM’s top management committee, have been elected to replace them, and a search is under way for other independent directors.
The moves, which will leave Yahoo with a seven-member board appointed entirely since 2010, following intense pressure from Wall Street over a number of recent missteps, including the handling of leadership succession and the failure of negotiations over an acquisition by Microsoft in 2008.
The timing of the announcement raised questions about whether Yahoo’s effort to sell its large minority stakes in Yahoo Japan and Alibaba had slowed, since that might have prompted the company to accelerate the announcement of its planned board changes as a way to appease investors.
In his letter, Mr Bostock said progress was being made on the strategic front, including in the talks with Yahoo’s Asian partners, but added: “The complexity and unique nature of these transactions is significant.”
One person familiar with the sale negotiations said they were still making progress and might reach a conclusion in March, though Yahoo’s hopes of reaching the outline of a deal before the end of this month appeared to have been dashed.
“If this is going slower than Yahoo had hoped, it’s because it’s very complicated,” this person said. Another person familiar with the talks said they were unlikely to be delayed by the board changes.
The deal being discussed, known as a “cash-rich split”, would allow Yahoo to escape taxes on its profits from the investments, though part of the payment would have to come in the form of companies or other operating assets that it could run alongside its own business.
Time has been running out for Yahoo to head off a shareholder battle at its annual meeting, which usually takes place in June. Dan Loeb of New York hedge fund Third Point has threatened a proxy fight to replace directors and would need to submit proposals by late March – putting pressure Yahoo to convince shareholders before then that it is making progress with both internal changes and its strategic revamp.
Yahoo has already won some support from shareholders this year for its appointment of former PayPal boss Scott Thompson as its new chief executive and the resignation from the board of Jerry Yang, the co-founder who some blamed for the failure of the Microsoft acquisition talks.
However, the rest of the board has continued to face pressure following the failure of Carol Bartz, who was sacked as chief executive last September, to turn Yahoo around, and the slow pace of the strategic overhaul since then. Mr Bostock said the changes on the board would “accelerate the company’s transformation”.
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