Yahoo! shares spike 1.7 per cent after appointing interim CEO

Ross Levinsohn has replaced Scott Thompson, who resigned on Sunday.

The Yahoo! headquarters in Sunnyvale, California.
The Yahoo! headquarters in Sunnyvale, California.

With the departure of Scott Thompson as CEO of Yahoo! on Sunday amid controversy over an error in his academic record, the company's board of directors named Ross Levinsohn as interim CEO, effective immediately.

Levinsohn, who joined Yahoo! in 2010, will manage the company’s day-to-day operations with assistance from an existing senior leadership team.

Fred Amoroso was named chairman of the board. Amoroso replaces Roy Bostock, who stepped down from his role as non-executive chairman to accelerate the leadership transition for the new board.

The board reached an agreement with the investment firm Third Point, which owns 5.8 per cent of Yahoo! common stock, to settle its pending proxy contest related to its 2012 annual meeting of shareholders.

Under the agreement, three Third Point nominees – Daniel S Loeb, Harry J Wilson and Michael J Wolf – will join the Yahoo! board, effective 16 May. Yahoo!’s director nominees for election or re-election at the 2012 annual meeting of stockholders will now include Fred Amoroso, John Hayes, Peter Liguori, Thomas McInerney, Maynard Webb, Sue James, David Kenny and Brad Smith, as well as Loeb, Wilson and Wolf.

Amoroso, chairman of the board of directors at Yahoo!, said:

The board is pleased to announce these changes and the settlement with Third Point, and is confident that they will serve the best interests of our shareholders and further accelerate the substantial advances the company has made operationally and organisationally since last August. The board believes in the strength of the company’s business and assets, and in the opportunities before us, and I am honored to work closely with my fellow directors and Ross to continue to drive Yahoo! forward.

Daniel Loeb, CEO of Third Point, said:

Harry, Michael and I are delighted to join the Yahoo! board and work collaboratively with our fellow directors to foster a culture of leadership dedicated to innovation, excellence in corporate governance, and responsiveness to users, advertisers and partners. We are confident this board will benefit from shareholder representation, and we are committed to working with new leadership to unlock Yahoo!’s significant potential and value.

Following the announcement of the reshuffle, Yahoo!'s shares spiked 1.7 per cent.

The Wall Street Journal reported yesterday that Thompson has been diagnosed with thyroid cancer, which he says contributed to his decision to resign.