Yahoo! Inc. (NASDAQ:YHOO) reached an agreement with Starboard Value to add four independent directors to its Board. Its decision prevented a proxy fight with the activist hedge fund before the upcoming annual meeting of shareholders on June 24, 2015.
According to Yahoo, the new independent directors include Starboard’s CEO and Chief Investment Officer Jeffrey Smith; Tor R. Braham, Managing Director and Global Head of Technology Mergers at Deutsche Bank Securities; Eddy W. Hartenstein, a director of Tribune Publishing Company; and Richard S. Hill, Non-executive Chairman of Tessera Technologies
Mr. Smith will also join the company’s Strategic Review Committee. Starboard decided to withdraw its director nominees as part of the agreement.
Two incumbent Yahoo directors will not stand for re-election
The company’s two incumbent directors, Lee Scott and Sue James decided not stand for re-election during the annual meeting. They vacated their respective committee responsibilities effective immediately to ensure a smooth transition.
Yahoo Chairman Maynard Webb commented, “Sue and Lee have been exceptional board members. Sue has been the longest standing member of our board and an outstanding Audit Committee chair and Lee has served honorably as chair of the Nominating and Corporate Governance Committee. The entire Board and management team thank them both for their significant contributions over the years.”
Yahoo’s Board will have 11 members and Mr. Webb will continue to serve as Chairman.
A constructive resolution
In a statement, Yahoo CEO Marissa Mayer said, “This constructive resolution will allow management and the board to keep our focus on our extremely important objectives. Management is looking forward to working with the entire board, including the new directors, to maximize shareholder value.”
On the other hand, Mr. Smith said he was pleased that they reached a constructive agreement with the company. According to him, “We look forward to getting started right away and working closely with management and our fellow Board members with the common goal of maximizing value for all shareholders.”
Starboard owns 1.7% stake in Yahoo and has been pushing for significant changes in the leadership, execution, and strategy of the company to drive growth. One of its proposals was to explore a possible sale of its core internet business.
The company is pursuing an aggressive strategic plan to drive growth. Yahoo recently closed the bidding process for its core internet business. Several interested buyers including Verizon Communications (NYSE:VZ), YP Holdings and private equity firms reportedly submitted proposals to Yahoo.