Yahoo's board should start talking about firing Marissa Mayer, says SunTrust analyst Robert Peck

It may be time to remove Marissa Mayer as CEO of Yahoo, says Robert Peck, an analyst at SunTrust.

In a new note on Yahoo, essentially written to the company's board members, Peck says investors are getting anxious over Mayer's performance.

Investors are concerned about:

• The core business, which is in decline.
• The potential of the Alibaba shares getting taxed when Yahoo spins them off, which would cost billions.
• Yahoo losing executives this year.

"Investors are asking how engaged the board is and what it needs to see to enact change," Peck wrote, adding, "We have faith in the board honoring its fiduciary responsibility, and would expect some publicly visible demonstration in strategy, asset rationalization, or management."

For those that don't speak analyst, what Peck is really saying is, "Hey board members, time to step it up. Investors are freaked out, and you're not helping."

The main problem is that Yahoo is in worse shape today than when Marissa Mayer took over.

"Investors remain concerned that after ~3.5 years and $7B in spending (M&A and R&D), management has been unable to show meaningful progress in the core turnaround," writes Peck. "In fact, since 2012, reported Revenue and EBITDA have declined 9% and 45% respectively, and the trend appears to be worsening recently."

Here are two charts to illustrate the problems:

At the same time the business is in decline, Mayer is losing her executives, which Peck sums up in this table:

Mayer has reportedly hired consultants from McKinsey to look at Yahoo to help it restructure the business.

As a result of the executive turnover, and the consultants, Peck suggests it may be time for Yahoo's board to remove Mayer. Here's Peck, with our emphasis added.

The company also mentioned on the earnings call that now may be "a unique opportunity to reset" and Recode reports that the company is hiring a consulting firm to plan yet another reorganization. Investors are asking that if this is true, is this a natural time to consider changes at the CEO level as well, given the issues discussed above. We believe the board must assess if the current management team has support of 4 factions: senior executives, employees, partners, and investors. If not, we think a seamless transition to new leadership could be in the best interest of the company and shareholders.

For what it's worth around this time last year, Peck warned that there was a "good chance" Dick Costolo would not be CEO of Twitter. That turned out to be true.

It looks like he's now warning that Mayer is in trouble.