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Yahoo’s New Activist Board Member Says Management Has Been ‘Welcoming’

May 3, 2016, 11:17 AM UTC
Key Speakers At The Hedge Funds Summit
Jeffrey Smith, chief executive officer and chief investment officer at Starboard Value LP, speaks during the Bloomberg Hedge Funds Summit in New York, U.S., on Wednesday, December 5, 2012. The Bloomberg Hedge Funds Summit convenes managers and investors to discuss the impact of the European debt crisis on the global markets and break down the fundamentals driving volatility in the equity markets. Photographer: Michael Nagle/Bloomberg via Getty Images
Photograph by Michael Nagle — Bloomberg via Getty Images

Yahoo’s management team and directors have given a warm welcome to Starboard Value Chief Executive Jeffrey Smith since he joined the company’s board after a contentious battle, he said on Monday.

“Yahoo has been great,” said Smith, who was speaking on a panel at the Milken Institute Global Conference here. “The board members have been terrific and welcoming, the management team has been terrific and welcoming. This is no different from almost all of the companies that we get involved with.”

The founder of the activist hedge fund is coming off a major agreement struck with Yahoo (YHOO) last week, in a deal in which Smith and three associates joined the Internet company’s board of directors after a contentious battle that nearly went to a shareholder vote.

After more than a year of pushing for business and leadership changes at Yahoo, Starboard nominated a nine-member slate this spring to replace Yahoo’s entire board. With the proxy battle now finished, the company is pressing ahead with the auction of its core business.

Smith was asked on the panel what it was like to arrive on the board of a company that has been the target of one of his firm’s attacks.

“It’s much more collegial than anyone would expect” when we go into a company, he said. “This is business, it’s not personal.”


In October 2014, Starboard won a proxy fight against Olive Garden parent Darden Restaurants (DRI), with shareholders supporting the activist’s campaign to overthrow the company’s entire board.

Smith, who was accompanied on the panel by current Darden CEO Eugene Lee, said arriving on a board with that level of shareholder mandate is extremely powerful.

But he added that proxy fights are costly and time-consuming, and that sometimes getting inside the board room quickly is the best option.

“It’s a tough call,” Smith said.

Smith was also asked about Starboard’s investment in department store operator Macy’s (M), whose shares have fallen by roughly half since Starboard invested in the company last year.

Smith said the company has reduced costs and has laid out a plan to monetize its real estate, but he admitted that Starboard invested too early.

“Sometimes you don’t get the timing right,” he said.

Starboard had $4.6 billion in assets under management as of Dec. 31, according to a regulatory filing.