As blustering Bartz fades to black, some of Yahoo's big institutional investors are turning their attentions to what they regard as a weak and ineffective board of directors and a damaged chairman. They want radical change and they might well get it as a merger or sale begins to look inevitable. By Martyn Warwick.
During the all the fireworks, swearing and recriminations that characterised the dismissal last week of Yahoo CEO Carol Bartz, the lady in question told Fortune magazine that although the company board might have prised her, kicking and screaming, out of the executive suite, she remained a major Yahoo shareholder and company director and fully intended to attend board meetings in future and to sit alongside those who plotted her precipitate departure, the ones she calls "doofuses."
That, it turns out, as Bartz herself might well have said, was complete bullshit. It was bad-tempered bluster pure and simple. The reality, as Yahoo's lawyers made explicit in a very pointed statement, is that her resignation on September 9 meant that she had also automatically resigned as a member of the Yahoo board and that she would not be admitted to any future meetings of that august body.
So, she's gone - for once and for all - and all we'll hear henceforth is increasingly distant echoes as Bartz rails impotently against her enemies. As Shakespeare has it in Macbeth, it is "sound and fury, signifying nothing."
But the Yahoo imbroglio continues with the spotlight now falling on the company's chairman, 70 year-old Roy Bostock - the fellow who fired his CEO over the phone by reading from a pre-prepared script.
We don't know if Mr.
Bostock took that particularly cowardly route because he was physically afraid of the volatile Bartz's likely reaction at a face-to-face meeting but the episode certainly smacks of a marked lack of intestinal fortitude.
Whatever the reason, his actions have caused the already battered Yahoo even more bad press and now major institutional investors are openly questioning his suitability as chairman - a post he has held since 2008.
They want to know why the board employed Carol Bartz in the first pace and also why it took so long to get rid of her after it became abundantly obvious that her slash and burn strategy to kick start stalling revenue flows was a failure.
Bostock and his board are all tarred with the same brush as far as some big Yahoo stockholders are concerned. They let the chance of a lifetime slip through their fingers when they didn't quickly agree to sell the company to Microsoft for US$45 BILLION! They have been looking over their shoulders and back at the spectre of what might have been ever since - and while they have been doing so Yahoo's value has declined, declines and declined again.
As TelecomTV reported last week, Daniel Loeb, whose Third Point hedge fund owns more than five per cent of Yahoo, is one of the regime's harshest critics and is demanding that blood be let and heads roll. Indeed, he is so angry that he has publicly announced that he intends to try to garner sufficient support form other disgruntled shareholders to remove the current board at Yahoo's next AGM.
In a regulatory filing Mr. Loeb says, "Yahoo's current board of directors has made a number of decisions that have directly harmed the company and resulted in a stock price far below the company's intrinsic value."
So a far, all the board has done in response to what is an increasingly credible threat to its continued existence is to issue an anodyne statement saying, it "recognizes the critical challenges facing the company and appreciates constructive input from all shareholders." Yeah, right.
In reality, (and as we reported yesterday) what's happening is that Yahoo is likely to merge with AOL or be sold, complete or piecemeal, to the highest bidder - and the winning bid may not be all that high.
Thus, it seems likely that Mr. Bostock's days are also numbered. Commenting on the messy firing of Ms. Bartz and its unedifying aftermath, Jeffrey Sonnenfeld, a big cheese at Yale School of Management, said that Chairman Bostock "needs privately to work on a transfer of power on the board to someone who's not as soiled by these terrible decisions."
Good word, "soiled".
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