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Yahoo adds directors as company struggles with turnaround
[NEW YORK] Yahoo! Inc filled out its board, adding two independent directors at a time when the once-dominant Internet company is facing major strategic decisions and pressure from shareholders about how to salvage itself.
Catherine Friedman, a former managing director at Morgan Stanley, and Eric Brandt, a former chief financial officer of Broadcom Corp, joined the board, Yahoo said in a statement. That brings the total back to nine and replaces Charles Schwab, the eponymous founder of the discount brokerage, and Max Levchin, Chief Executive Officer at lending startup Affirm, who both resigned late last year, according to filings.
"Today we are at an important juncture in Yahoo's transformation, as we execute on our refined strategy and explore strategic alternatives for the company," Maynard Webb, Yahoo's chairman, said in the statement.
Chief Executive Officer Marissa Mayer is potentially facing a proxy battle from activist shareholders after struggling to boost sales and separate Yahoo from a US$26 billion stake in Alibaba Group Holding Ltd. In the last few months, the company scrapped the long-planned Alibaba spinoff, tried to pursue a reverse spin of its core assets and said it would explore bids for its business after prompting from activists.
"As the company has underperformed significantly and experienced executive turnover, as it's about to make some very serious decisions about their future, it's been increasingly important to a lot of shareholders that there be greater independence on this board - such that public shareholders can have greater confidence that the board would in fact be acting on behalf of the public shareholders," said Paul Sweeney, an analyst at Bloomberg Intelligence.
The shares fell less than 1 per cent to $33.19 at 9:35 am in New York. They have declined 22 per cent in the past year.
In the days after Yahoo said it would consider a sale, some would-be buyers said they were getting a cold shoulder and came away with the impression that Mayer and the board weren't aligned in backing a possible deal, people familiar with the matter have said.
Starboard Value LP, the most outspoken activist shareholder with less than 1 percent of Yahoo's shares, has urged the company to overhaul its management and board. Starboard said in January that investors have "no confidence" that management or the board would be able to improve the company's performance.