After six years at the helm, Yahoo CEO Terry Semel ended his sometimes-tumultuous reign Monday, agreeing to step down and be replaced by the Internet giant’s cofounder and longtime board member, Jerry Yang.
Semel -- who joined Yahoo as chairman and CEO in 2001 after heading the Warner Bros. film studio for two decades -- had been under fire for the past few years as the Internet-search giant’s stock lagged behind Google and as it ceded market share to the online-advertising giant.
Yahoo’s share price dipped 35% last year while rival Google’s stock rose 11%. While Yahoo’s stock price is up about 10% so far this year, it has struggled with slow growth and increasing competition.
Semel also attracted the ire of some shareholders with his annual compensation package, which some believed was excessive given Yahoo’s performance. Semel received about $107 million in compensation in 2006.
The announcement of Semel’s departure came after the market close, but Yahoo stock was still up 81 cents per share (3%) to $28.12 each in 4 p.m. (EST) trading Monday. The stock went as high as $30.25 per share in after-market trading as of 5:19 p.m.
In a prepared statement, Yahoo said Semel will remain as nonexecutive chairman and serve as an adviser to the company. Yahoo added that executive vice president and head of the advertiser and publisher group Susan Decker was named president.
Speculation has swirled for years as to a successor to Semel, who is 64. In a prepared statement Monday, the former CEO said he had long been in discussions with Yahoo’s board concerning the importance of ensuring a smooth succession in senior leadership.
“As we discussed my future goals and plans, I was clear in telling the board of my desire to take a step back sooner rather than later,” Semel said. “I believe Jerry and Sue, with their superb talents and intense dedication to Yahoo and its people, are the perfect combination to carry us forward.”
Yang formed Yahoo in 1994 with David Filo -- who, along with Yang is listed as chief Yahoo on the company’s Web site -- when both were doctoral students at Stanford University. He thanked Semel for his leadership in a statement.
“My immediate and overarching priorities are to realize Yahoo’s strategic vision by accelerating execution, further strengthening our leadership team and fostering an even stronger culture of winning,” Yang said.
As part of this management change, Decker will assume leadership of Yahoo’s business operations, including the Advertiser and Publisher Group, the Yahoo Network, Connected Life and its international operations. The Technology Group and all corporate functions will report to Yang. Filo will oversee the company’s technology organization as Yahoo searches for a new chief technology officer.
Because Semel resigned as CEO and will continue on as nonexecutive chairman, the company said there will be no separation agreement with him.