Yahoo Inc. named three new independent directors to its board after failing to reach a compromise with Third Point LLC, which plans to wage a proxy fight to install its own slate of nominees.
The new directors are former Fox Broadcasting Network Chairman Peter Liguori, American Express Co.Chief Marketing Officer John Hayes and Thomas McInerney, who is leaving as chief financial officer of IAC/InterActiveCorp, 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 CEO Scott Thompson, who took over in January from eBay Inc.'s PayPal unit, is shaking up the board amid mounting shareholder pressure.
The Sunnyvale, Calif.-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. and Facebook Inc.
"We have appointed a capable and dynamic CEO who is driving the business toward 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, which owns about 5.8% of the company, announced plans this month to seek shareholder votes on its proposed slate of four new directors, including Mr. Loeb.
"Third Point offered several significant compromises to strike a deal and avoid a proxy contest," the New York-based firm said yesterday. "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 Mr. Loeb, Yahoo said.
"The board remains open to hearing Third Point's ideas and to working constructively with Third Point," Yahoo said. In February, Yahoo added two directors and announced that Bostock and three others would not seek re-election. The new board members were Alfred Amoroso, a former IBM Corp.executive who ran Rovi Corp. until last year, and Maynard Webb, eBay's former chief operating officer.
Yahoo rose less than 1% on March 23, to $15.39. The shares have declined 4.6% this year.