An outspoken Yahoo Inc shareholder said on Monday he considers former Yahoo executives Ross Levinsohn and Jacqueline Reses as potential replacements for Chief Executive Officer Marissa Mayer as the internet company comes under pressure to change strategic direction.
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Yahoo abandoned a long-held plan to shed its valuable stake in Chinese e-commerce provider Alibaba Group Holding Ltd., due to concerns about a high tax bill, and instead is now considering bundling the rest of its assets into a separate, standalone company. Mayer plans to discuss her strategy during the company’s fourth- quarter earnings call next month, which could include simplifying Yahoo’s structure or improving its expense discipline.
Yahoo declined to comment.
Eric Jackson, managing director of SpringOwl Asset Management, a New York-based hedge fund, has sent Yahoo’s board a scathing review of the company’s management.
SpringOwl told AFP that it sent a copy of the 99-page presentation to Yahoo before making it public.
In the presentation, SpringOwl also said it disagrees with shareholders who want Yahoo to sell its core Internet businesses, like email and online search, and would prefer instead to first turn the business around.
If she stays on board for another year and a half, Marissa Mayer will make $365 million for five years of work at Yahoo. Some argue for Yahoo to sell its core businesses as quickly as possible. With cost cutting and improvements to profitability, he predicts it could eventually be acquired for more than $24 billion. SpringOwl is only a $300 million fund. But his plan is to round up major shareholders to rally around his plan.
Jackson is among the growing list of Yahoo shareholders who are voicing their frustration with Mayer and calling for a different path than the one Yahoo recently laid out.
“We do not understand the board’s continued support of the company’s senior management team, given its track record”, Canyon Capital wrote. Canyon Capital, which owns about 10 million shares, or 1.1 per cent of the company, criticised directors for failing to prepare a backup plan to the Alibaba spin-off. Yahoo’s ongoing financial funk has intensified speculation that Mayer might not be Yahoo’s CEO a year from now, although company Chairman Maynard Webb said Wednesday that Yahoo’s board still has faith in her.
Canyon Capital wasn’t the only investor with something to say about the current state of Yahoo.
Last week, Yahoo announced a new plan for separating its $32 billion Alibaba stake from Yahoo’s other businesses amid concerns that the Alibaba stake has been overshadowing the value of Yahoo’s other businesses for years.
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Yahoo’s board said last week that it is not actively exploring a sale.
