The activist hedge fund investor Starboard Value has called for the replacement of the entire Yahoo board.
In a letter to shareholders it said it was “extremely disappointed with Yahoo’s dismal financial performance, poor management execution, egregious compensation and hiring practices”.
Recent results showed Yahoo made a loss of $4.3bn (£3bn) loss for the year.
Yahoo said in a statement it would “review Starboard’s proposed director nominees and respond in due course.”
Starboard’s letter included accusations that the company generally lacked accountability and oversight by the board.
The former internet trailblazer has been struggling to deal with falling share prices and investor dissent.
Yahoo said it would cut 15% of its workforce as it pursued what it called an “aggressive strategic plan” to return to profitability.
The job cuts will reduce the number of its employees to about 9,000 by the end of 2016.
Starboard Value also said the company, which has been led by chief executive Marissa Mayer for the past four years, was undervalued by investors.
Starboard said there were opportunities to unlock “significant value” for investors but it said the board were not the people to do it: “We believe the board clearly lacks the leadership, objectivity, and perspective needed to make decisions that are in the best interests of shareholders.”
In December, the company announced it was reversing a plan to sell its stake in the Chinese e-commerce site Alibaba, and would instead look to spin off its core internet business.
Ms Mayer was forced to change course on the Alibaba sale following pressure from several activist investors.
It is also closing offices in Dubai, Mexico City, Buenos Aires, Madrid, and Milan.
Starboard owns 1.7% of Yahoo.