Yahoo Inc (NASDAQ:YHOO) on Wednesday agreed to add four new independent directors to its board, bowing to pressure from activist hedge fund Starboard Value LP and averting a proxy fight ahead of its upcoming annual meeting.
Yahoo said Starboard Chief Executive Jeffrey Smith, along with tech and media industry veterans Tor Braham, Eddy Hartenstein, and Richard Hill, will join the Internet company's board immediately. All four directors were on the slate Starboard proposed last month as it sought to overthrow Yahoo's entire board if a deal between the two sides failed before the annual meeting.
Smith, in a critical part of the agreement, is also joining Yahoo's strategic review committee, which is overseeing the company's sale of its core business.
Yahoo said in a statement that at the annual meeting, two incumbent directors would step down, but did not name the individuals. With the addition of the four new directors, Yahoo's board will have 11 members.
Yahoo's agreement with Starboard means the company can now put the prospect of a costly and distracting proxy fight behind it, and focus on the sale of its core search business, which is fielding bids from potential buyers.
"This constructive resolution will allow management and the board to keep our focus on our extremely important objectives," Yahoo CEO Marissa Mayer said in the statement. (Additonal reporting by Rishika Sadam in Bengaluru; Editing by Savio D'Souza and Meredith Mazzilli)