Facing stagnant sales and an activist board keen on imposing its own leadership, AOL (NYSE:AOL) appointed former board member Karen Dykstra as the chief financial officer of the company and PepsiCo’s (NYSE:PEP) Chief Financial Officer Hugh Johnston as director.
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Since Time Warner (NYSE:TWX) spun off AOL as an independent company in 2009, the web portal has transformed its business. Becoming CEO earlier that year, Tim Armstrong reshaped the company into an ad-based publishing business, buying the Huffington Post for $315 million in 2011 and then investing $300 million in the local-news provider, Patch, in 2012.
With sales slow early in the year, AOL decided in April to sell and license more than 800 patents and patent applications to Microsoft (NASDAQ:MSFT) for $1.06 billion. The patent sale, along with a stock buyback agreement and a special cash dividend announced last month, was part of the company’s efforts to return approximately $1.1 billion to shareholders.
Armstrong’s changes bolstered AOL’s stock price, which more than doubled this year. The improving stock price helped the company’s CEO prevent activist investment firm Starboard Value from shaking up the board earlier in September. Starboard, which currently owns 3 percent of outstanding shares, has tried to appoint three directors this year. The firm has said AOL spends too much money on failed efforts, like Patch.
According to company statements, both Dykstra and Johnston will serve as key members of the executive team.
“Hugh’s financial expertise and consumer-industry experience makes him a great addition to the board,” said Armstrong said today.
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