Yahoo! Inc. (YHOO) named three new independent directors to its board after failing to reach a compromise with Third Point LLC, which is planning to wage a proxy fight to install its own slate of nominees.
The new directors include former Fox Broadcasting Network Chairman Peter Liguori, American Express Co. (AXP) Chief Marketing Officer John Hayes, and Thomas McInerney, who is leaving as chief financial officer of IAC/InterActiveCorp (IACI), Yahoo said yesterday in a statement.
Yahoo said the board offered to add one of Third Point’s nominees, Harry Wilson, and another member that both sides could agree to. Third Point Chief Executive Officer Daniel Loeb rejected the proposal and refused to back down from the dispute unless he himself was named a director, Yahoo said. Third Point said it was “disappointed” in yesterday’s move by Yahoo and would proceed with its proxy fight.
Yahoo Chief Executive Officer Scott Thompson, who took charge in January from EBay Inc. (EBAY)’s PayPal unit, is shaking up the board amid mounting pressure from shareholders. The Sunnyvale, California-based company has irked investors in the past for turning down a $47.5 billion bid from Microsoft Corp. and losing market share to Google Inc. (GOOG) and Facebook Inc.
“We have appointed a capable and dynamic CEO who is driving the business towards its next era of success,” Roy Bostock, chairman of the board, said in yesterday’s statement. “We have reconstituted the board of directors with the right mix of experience and expertise to help Yahoo build upon its very strong assets and brand base to take advantage of the opportunities ahead.”
Third Point Nominees
Third Point, which owns about 5.8 percent of the company, announced plans this month to seek shareholder votes on its proposed slate of four new directors, including Loeb.
“Third Point offered several significant compromises to strike a deal and avoid a proxy contest,” the New York-based firm said yesterday in a statement. “The board has shown yet again that they are unable to execute deals that are in the company’s best interests. Sadly for shareholders -- who will once more bear the costs -- the consequence of the board’s refusal to accept Third Point’s shareholder-friendly proposals will be a time-consuming and distracting proxy contest that the company can ill-afford.”
Yahoo reached out to Third Point on the nominees to avoid the “cost and distraction that inevitably accompanies a proxy fight,” the company said. Still, the board determined that other nominees were more qualified than Loeb to be a director, Yahoo said. “The board remains open to hearing Third Point’s ideas and to working constructively with Third Point,” the company said.
Thompson expects the new board members to challenge and engage him as he works toward a turnaround, he said in an e- mailed letter to employees, dated yesterday, that was included in a regulatory filing today.
“The board and I will not be distracted from doing the hard work necessary to get Yahoo back on track,” he wrote. “Together with our new directors, we can all bring Yahoo back to being the forward-leaning engine of growth and innovation we all want it to be.”
In February, Yahoo added two directors and announced that Bostock and three others wouldn’t seek re-election. Those new board members were Alfred Amoroso, a former International Business Machines Corp. executive who ran Rovi Corp. (ROVI) until last year, and Maynard Webb, EBay’s ex-chief operating officer.
Yahoo rose 1 percent to $15.54 at the close in New York. The shares have declined 3.7 percent this year.