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Starboard Launches Proxy Fight To Remove Entire Yahoo Board (reuters.com)
An anonymous reader quotes a report from Reuters: Activist hedge fund Starboard Value LP moved on Thursday to overthrow the entire board of Yahoo Inc, including Chief Executive Marissa Mayer, who has struggled to turn around the company in her nearly four years at the helm. Starboard, which has been pushing for changes at Yahoo since 2014 and owns about 1.7 percent of the company, said it would nominate nine candidates for the board. The proxy fight comes as Yahoo is pressing ahead with an auction of its core Internet business, which includes search, mail and news sites. Yahoo and Starboard could still come to an agreement before the company's annual meeting, expected to be in late June. If they cannot avoid a proxy fight and the Yahoo board election is taken to a shareholder vote, attention will swing to the large mutual and index funds that own the stock and will carry heavy weight in the final tally. Yahoo and Starboard representatives met on March 10 to discuss ways the two sides could avoid a proxy fight, according to people familiar with the matter. But those talks broke down, in part because Starboard was upset by Yahoo's announcement that same day that it appointed two new board directors, these people say.
The only thing a proxy fight can do is devalue the company even more. Just as the stupid fight to oust Marissa Meyer has devalued the company. Yahoo lost as a Big Internet company when it outsourced search to Google and focused on content. Content is hard, expensive, competitive and very hit or miss. By the time you know whether or not you have a winning combination you may have already moved on to try something else. And as far as I can tell Yahoo has just a few brand/content offerings that are very popular with everything else just kind puttering along. The Internet needs some more non-Facebook-Google-Twitter Internet companies to remain vital and it is too bad Yahoo has been on the long slide down.
Someone who owns less than 2% of the company is drawing massive attention towards something that will keep the leadership from doing what the company needs long term.
And they are doing it by going around to people who control larger blocks and convincing them that something needs to be done.
Obviously the arguments they are using are resonating with the people who own the larger blocks.
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If Starboard has taken over they should fire every web developer and person involved with the crapfest they call a web site. Since they changed to the horrid design I, and many others I know, haven't gone back.
It had to have been "redesigned" by a web developer because no one with any sort of common sense or scintilla of design comprehension would have thought it looks good or is usable.
The next up to be fired are the idiots who force people to give up their phone number to make an account. It doesn't do anything for security or prevent spammers from generating accounts. All it does is annoy people.
This is probably one of the few times a hedge fund taking over a company may actually produce something useful.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
This is how major changes happen at big corporations. The fundamental principle that the board must represent the shareholders, and the CEO must keep the board happy, isn't some myth. "Activist shareholders" can only make noise, by themselves, but if they're making compelling arguments then they can win. They'll need the votes of the majority of shares, though.
I've worked at 3 companies in my career (thus far) that fired the CEO in an act of shareholder revolt - in 2 cases the board acted on their own initiative, and in 1 case it was shareholder activists (with majority backing) forcing the company to change the way it did business.
It's not usually a question of "the right person" but of "entirely the wrong focus for the business" (at least in the opinion of one side).
Socialism: a lie told by totalitarians and believed by fools.
Another one, before they started losing customers en mass: IBM. Before they consolidated their employees to the GDC model (which had them working from homes or perhaps if they had a local IBM office), customers would have dedicated IBMers with them for a particular role. Now that many of those dedicated people were told to either move to a remote location or lose your job, well... And all of this was before the massive overseas transition, too. This was when IBM still had a sizeable portion of their workforce in the US. Not even 8 years ago.
The problem that's gripping the American public business climate is that the board of directors are often token shareholders if that. These days usually more than half the board of directors are CEO friends of the current CEO. This is why executive salaries are sky rocketing. There is no owner chokehold on the management of the companies anymore as the board of directors votes to raise one CEO's pay and he returns the favor by voting for the same thing on all the board's of directors he sits on.
Shareholders have abrogated their responsibility and are allowing these sham boards and leaders to run companies into the ground to enrich themselves. Most of this is because the majority of shareholders these days are mutual funds and retirement groups (called institutional investors) that take no responsibility for the massive stock holdings they have. It allows these companies to sail along rudderless diverting shareholder resources into the pockets of the executive management.
But these activist investors are NOT the solution. They are sharks that are out to gut the company and sell the assets to make a couple bucks short term profit. The only real answer to this problem is for the investors, in particular the institutional investors (including the mutual funds that hold almost all stock) to hire or appoint board members that actually look after stockholders interests including long term growth and profit. Until that happens the US will continue to decline.