Yahoo board wins surprise backing of shareholders

 

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Posted on 4 Aug 2008 at 08:18

Yahoo's board of directors has won strong backing from shareholders at its annual meeting, with Jerry Yang, the company's embattled CEO, receiving 85% of the vote in his favour.

Investors holding nearly 76% of Yahoo's 1.38 billion shares gave solid votes in favour of all nine current directors, in what represents an endorsement of their tough stance with Microsoft in talks on a merger or partial sale.

Executives and board members tried to soothe dissenting investors, insisting Yahoo had been serious in the Microsoft talks and that it had good prospects in the next three years.

Seeking to counter attempts by some to blame Yang for talks collapsing, Chairman Roy Bostock said Yahoo's board "called the shots" when discussing Microsoft's proposals, including a $47.5 billion (£24 billion) bid and attempts to buy Yahoo's web search business.

Bostock said he couldn't understand why the software maker withdrew its bid. "There was never a compelling offer put on the table," he said.

A Microsoft spokesman disputed Bostock's version of events, saying "Yahoo is attempting to rewrite history yet again."

Surprise vote

The solid vote in favour of the directors surprised even some Yahoo officials, who had been braced for a stronger protest after the tumultuous Microsoft saga and older grievances over Yahoo's slipping performance against Google.

Three members of Yahoo's executive compensation committee - Bostock, Ron Burkle and Arthur Kern - each received about 80% in favour of re-election, with the remaining votes withheld in protest. The "Gang of Three," as one dissident labelled them at the meeting, had received more than a 30% unfavourable vote at the 2007 annual meeting.

Several proxy advisory firms whose recommendations can carry weight with institutional investors had advised investors to withhold their votes for the three directors.

They have been the target of corporate governance critics over big stock-option packages granted to former Chairman and Chief Executive Terry Semel, who resigned as CEO after protests at last year's meeting over Yahoo's flagging performance.

A handful of investors at the meeting criticised the board and management, highlighting dissatisfaction that has hurt the stock since talks on a full Microsoft merger broke up in May.

"I think you have overpaid in terms of executive compensation, overplayed your hand with Microsoft and overstayed your welcome on the board," said Eric Jackson, a vocal critic of Yahoo's leadership, who leads a loose-knit group of shareholders who collectively own 3.2 million shares.

Another investor said he wanted to know more about how much time Yahoo directors worked to earn their pay.

The board chairman said he would be happy to fill out a timesheet, given the hours spent negotiating with Microsoft over the past six months. "It's been about 26 hours in the course of a 24-hour day," Bostock said.

Others renewed calls for Yahoo to do more to protect the human rights of users in authoritarian countries such as China, after Yahoo was widely criticised for handing over emails to authorities that were used to jail political dissidents.

Green-tentacled octopus from Redmond

Yet Yahoo did receive praise from other investors, including Richard Lammerding, 71, of Cloverdale, California, who said he owns 1,200 Yahoo shares with his wife. "My support and my wife's support is with this board and this management team," he told the annual meeting in San Jose, California.