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Yahoo added four new directors to its board in a settlement with activist investor Starboard Value, the company announced Wednesday.
Starboard CEO Jeffrey Smith will join Yahoo's board immediately, joined by M&A banker Tor Braham, media executive Eddy Hartenstein and technology executive Richard Hill, the company said. Two current independent directors, Lee Scott and Sue James, opted not to stand for re-election as part of the move.
The board will also shake up its structure, with Braham joining the audit and finance committee, Smith and Hartenstein joining the compensation and leadership development committee, and Hill joining the nominating and corporate governance committee, the statement said.
Maynard Webb will continue to serve as chairman of the now-11-member board.
"This constructive resolution will allow management and the board to keep our focus on our extremely important objectives. Management is looking forward to working with the entire board, including the new directors, to maximize shareholder value," , CEO of Yahoo, said in a statement.
Yahoo shares closed down 0.43 percent Wednesday.
The boardroom shuffle came after years of Starboard pushing Yahoo to make big changes to revamp shareholder returns. As Yahoo's stake in Asian companies like Alibaba and Yahoo Japan eclipsed the worth of its internet holdings, Starboard has called for the sale of Yahoo's core business.
Earlier this month, Smith told CNBC that the ideal outcome for Yahoo was a sale for "the highest possible price that they can get," but he didn't see enough mutual trust between Yahoo and Starboard to protect shareholders.
"There have been cases with this management team and this board where they've said they are going to do things over the last several years and then they didn't follow through," he said from 13D Monitor's Active-Passive Investor Summit in New York City.
— CNBC's Everett Rosenfeld contributed to this report.