Today’s Wall Street Journal reports that a group of Yahoo investors have written a letter to company Chairman Maynard Webb questioning CEO Marissa Mayer’s leadership and calling on her to step down from Walmart’s Board of Directors in order to focus on Yahoo’s problems.
The letter from the Change to Win Investment Group, an affiliate of the Change to Win labor federation, also questions Yahoo’s executive compensation practices, in light of the massive $109 million payout to former chief operating officer Henrique de Castro. De Castro was recently let go by Mayer after just 15 months on the job. During that time De Castro failed to spark a turnaround in Yahoo’s declining ad revenues.
Following de Castro’s firing, Mayer re-organized executive functions at Yahoo and announced that she herself would assume greater responsibility for the advertising portfolio. According to the Journal, CtW suggests that Mayer should give up her spot on the Walmart board in order to focus her energies on these additional responsibilities.
CtW also asks Yahoo to detail de Castro’s compensation package and revise compensation practices to ensure that the de Castro experience is not repeated.
Mayer was famously involved in the recruitment of de Castro, her first big hire upon assuming the top job at Yahoo. CtW points to Mayer’s role in a section of the letter published by the Journal:
“The decision to pursue Mr. de Castro so aggressively, but to then sever the company’s relationship with him so quickly, does not give us confidence that Yahoo’s turnaround strategy is progressing as you and we might have hoped.”
The fact that Mayer poached de Castro from Google, where she was an executive prior to joining Yahoo, has led Nicholas Carlson to suggest that she should have been more aware of his weaknesses, which were well-known to other Google insiders.
Will the CtW letter have an impact? Yahoo is not responding publicly, but The Journal notes that CtW played a role in the board shakeup at Hewlett Packard last year.
As Mayer’s celebrity shine begins to dull in light of continued weakness in Yahoo’s core business, it remains to be seen if this bold challenge to her leadership will snowball. For now, she still has the protections afforded by Yahoo’s stake in Chinese internet giant Alibaba.
Of course, all of this gives renewed urgency to a question we have asked before – given the turmoil at Yahoo, “Is Marissa Mayer too busy for Walmart?” Apparently, some Yahoo investors think so.