Starboard Value LP launched a proxy fight on Thursday to remove the entire board of Yahoo, including Chief Executive Marissa Mayer. The activist hedge fund, which owns about 1.7 percent of the company, said it would nominate nine candidates for the board.

The proxy fight comes as Yahoo is pressing ahead with an auction of its core Internet business, which includes search, mail and news sites.

"It is unfortunate that this action is necessary," Starboard said in a letter to Yahoo shareholders.

"We have been extremely disappointed with Yahoo's dismal financial performance, poor management execution, egregious compensation and hiring practices, and general lack of accountability and oversight by the board."

However, Starboard said it remained open to discussions with Yahoo and was hopeful that it could reach an agreement to get involved with the company.

Starboard's nominees include its chief executive, Jeffrey Smith, and Eddy Hartenstein, the former chief executive of Tribune Co.

Yahoo said Thursday that its board's Nominating and Governance Committee would review Starboard's proposed director nominees and respond in due course.

Yahoo launched an auction of its core business in February after it shelved plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd.