Starboard, a long-time critic of the company and an activist shareholder with a 1.7% stake, nominated its chief executive, Jeffrey Smith, among others for election at Yahoo’s annual meeting later this year, according to a letter to shareholders.
With little progress to show for her revival efforts after more than three years, investors are losing patience with Ms Mayer, who has presided over sluggish sales growth and failed to separate Yahoo’s main web business from its multibillion-dollar stake in Alibaba Group.
Starboard first began to call for changes in 2014 and recently stepped up criticism of management, even as Yahoo said it would consider alternatives, including the sale of the company’s core operations.
“We have been extremely disappointed with Yahoo’s dismal financial performance, poor management execution, egregious compensation and hiring practices, and general lack of accountability and oversight by the board,” Starboard said yesterday in a letter to shareholders.
“We believe the board clearly lacks the leadership, objectivity, and perspective needed to make decisions that are in the best interests of shareholders.”
Yahoo said that it “noted” Starboard’s announcement regarding the board nominations.
The board’s nominating and governance committee will review the nominees and respond “in due course”, Yahoo said in a statement.
For Ms Mayer, who sits on the board, it is another difficult step in her tenure that began as a turnaround effort when she arrived in July 2012.
In February, she rolled out her latest plan to overhaul the company, calling for employee cuts, product closures and other reductions to help drive efficiency and focus on growth opportunities.
Starboard is one of the most prolific US activist investors and has a track record of successfully pushing companies to heed its wishes.