Retirement was looking pretty good for Rick Hill in 2013, but the chance to do something big brought him back into the fold and he was a key player in Tessera Technologies' (TSRA) stunning turnaround.
Could Hill's spot on Yahoo!'s (YHOO) board be the catalyst for Yahoo!'s turnaround. Hill's experience with Tessera could serve as blueprint for what's in store at Yahoo! and current leadership has reason to be nervous.
In 2013, Hill had just completed the sale of his company Novellus Systems to Lam Research (LRCX) for $3.3 billion in an all-stock transaction in which Novellus shares were valued at a 28% premium when the deal was announced.
"I was happily retired until I saw something worth saving in Tessera and decided to help make a difference one more time," Hill wrote in a Forbes piece in May 2013.
In August 2012, two months after the sale of Novellus was complete, Hill earned a seat on the board of Tessera Technologies. Board seats aren't an uncommon position for retired CEOs. But Tessera was a little bit different: the semiconductor company was facing activist pressure from Starboard Value's Jeffrey Smith. Also, Hill had somewhat of a meteoric rise at Tessera. He was named chairman in March 2013 and, for a six-week period in the spring of 2013, he served as interim CEO.
Hill's relationship with Starboard was not an amicable one at first. In fact, Hill's Forbes piece was actually a plea for shareholders to vote against Starboard's plans to take over Tessera's board. Starboard, meanwhile, was similarly critical of Hill. In a presentation released in April 2013, Starboard acknowledged that although Hill's tenure with Tessera was short, his decision making had so far been poor and was emblematic of the poor decision making that had gotten Tessera in trouble.
Ultimately, Tessera settled with Starboard and gave it six seats on its 10-person board and Hill stepped down from his role as CEO and resumed his role as non-executive chairman.
"We are pleased to have reached this agreement with Starboard, which we believe is in the best interests of the Company and its stockholders," Hill said at the time. "We look forward to working with the Starboard nominees to execute a strategic plan for long-term sustainable growth and profitability."
Shares of Tessera are up 60% since Starboard and Tessera's agreement in May 2013 and now the team appears to be at it again with Yahoo!.
If Hill thought retirement looked good three years ago, we can only imagine that it would look more enticing now. Unless, of course, Hill saw a compelling reason to get back in the game in a big way. While Hill currently sits on the boards of Tessera, Cabot Microelectronics (CCMP), Autodesk (ADSK) and Arrow Electronics (ARW), Yahoo! is a different animal.
Starboard's campaign against Yahoo! has been well publicized. In demanding a complete overhaul of the board last month, Smith insinuated that the current board and management team could not be trusted to properly evaluate the course of Yahoo!'s core business and its stakes in Alibaba (BABA) and Yahoo Japan. Furthermore, Smith questioned the sincerity of Yahoo!'s process to court bidders for its core business.
"We believe our continued involvement is crucial to ensure a full and fair sale process and to put the best possible board in place in the event a transaction for the core business is not achieved in the near term," Smith wrote last month.
While Smith did not gain the totality of Yahoo!'s board -- or, even a majority -- since he settled with Yahoo!, we might assume that he assembled his most prized players. Smith and Hill battled before, which can often be the basis for strong working relationship.
Whether or not Yahoo! is successful in its efforts to sell its core business, given Hill and Smith's turnaround history, Yahoo! CEO Marissa Mayer has reason to be nervous.