Kai Ryssdal: In what's becoming something of a habit, Yahoo has a new CEO. Scott Thompson stepped down yesterday after just four months running the once path-breaking Internet company. It was his resume that did him in: a falsely claimed college major. An activist investor dug up that little nugget, the latest sign shareholders are looking at executives themselves -- not just their performance.
Marketplace's Stacey Vanek Smith reports.
Stacey Vanek Smith: Yahoo has been troubled for awhile, making it a prime candidate for activist shareholders.
Damien Park: Activist investors go hunting for undervalued companies.
Damien Park advises companies on how to deal with activist shareholders. He says activist shareholders take a big stake in a company and then push for changes they think will make the company's profits and stock price rise.
Michael Levin advises shareholders and write the Activist Investor blog. He says to build their case, they...
Michael Levin: Comb through securities filings, talk to customers, talk to suppliers and so forth.
And, in Yahoo's case, check resumes. Adviser Damien Park says activist shareholders do digging to gain leverage.
Park: It's not uncommon to do a background check or to hire some sort of a private investigation firm to attempt to dig up some dirt.
These are called Proxy fights and they can get expensive
Park: I haven't worked on a proxy campaign that cost a company less than $1.5 million and I have seen campaigns that have cost in excess of $20 million.
Park says most of the time, activist investors often do cause some kind of change. Daniel Loeb, the hedge fund manager who crusaded against Yahoo's CEO sure did. In addition to ousting the CEO, Loeb got three seats on Yahoo's board.
In New York, I'm Stacey Vanek Smith for Marketplace.