Yahoo Inc, which picked up Scott Thompson, the president of PayPal, eBay's online payment division, as its new CEO earlier this week, is reportedly searching for new directors.
The company is learnt to have hired Heidrick & Struggles International Inc, an executive search firm, to help it replace some of the existing directors on the board, including possibly Roy Bostock, the chairman, who is also vice-chairman at Delta Air Lines Inc.
Patti Hart, a director, who led the CEO search team, is believed to be leading the search for new directors. The internet giant has come under fire from investors for its poor performance and failure to accept a lucrative, nearly $50 billion takeover deal from Microsoft in 2008. In September, the company sacked the then CEO Carol Bartz.
Third Point LLC, a hedge fund headed by activist-investor Dan Loeb, which has also a 5.1 per cent stake in the company, has been critical of both Bostock and Jerry Lang, the co-founder. Loeb has also demanded the replacement of three other directors, including India-born Vyomesh Joshi, who is also the executive vice-president, imaging and printing group, Hewlett-Packard Company.
Yahoo has drawn up a strategic review – again criticised by Loeb – that aims to enhance shareholder value and promote growth and innovation. The review includes the possibility of the company being sold, broken up, or being taken private.
Thompson, however, dismissed talks of a replacement of directors as 'premature,' and said he would take up the matter at a later date. Shareholders have an opportunity to nominate directors to the board for a month from 24 February, and all nine directors are up for re-election this year.
Meanwhile, the struggling internet giant – facing competition from Google and Facebook – in a regulatory filing with the Securities and Exchange Commission revealed that the new CEO will be getting an annual base salary of $1 million.
However, adding up all the other extras, Thompsons stands to get a hefty compensation of nearly $27 million a year. Besides the base salary, he could get an annual bonus of 200 per cent, an equity grant with a target value of $11 million, a one-time 'inducement grant' of $5 million, a compensation of $6.5 million in restricted stocks for having leaving PayPal without the bonuses, and $1.5 million in cash as 'make-whole' bonus.