Yahoo released a recount vote for its board that showed strong opposition to CEO Jerry Yang and others. The vote came after a months-long buyout bid by Microsoft and a partnership with Google. A key Yahoo shareholder called for a probe of the vote.
SAN FRANCISCO (Reuters) - Yahoo Inc on Tuesday released a recount of
the vote for its board that revealed a strong protest vote against five
of nine directors, including Chief Executive Jerry Yang.
The Internet company said revised vote tallies showed 33.7 percent
of votes withheld for Yang, the company's co-founder, or more than
twice the opposition to his reappointment to the board as in the first
Yang has been under pressure for months over failed attempts by
Microsoft Corp to buy Yahoo and over questions about his leadership,
but early results from Friday's shareholder vote suggested the tide was
turning in his favor. The initial tally showed 85 percent of votes
going to Yang.
The stunning new twist in the Yahoo saga came after one of its
largest and most critical shareholders, Capital Research Global
Investors, called for a probe of the shareholder vote after finding
discrepancies in the results.
Analysts were split over whether the recount, while potentially
emboldening for critics, was a symbolic embarrassment to the leadership
or a new threat to its power.
"That's a big negative vote against the Yahoo board, but it doesn't
change anything," RBC Capital Markets analyst Ross Sandler said. "It is
a statement that they shouldn't be under any illusion that their
support is broad.
"The recount somewhat lowers the credibility of the management
team," Sanford C. Bernstein analyst Jeffrey Lindsay said. "Assuming
this was all a mistake, it is particularly unfortunate: Management
doesn't have the mandate they appeared to have had" coming out of the
annual meeting, he said.
Yahoo said it had been informed by Corporate Election Services, the
company's inspector of elections, that Broadridge Financial Solutions,
a proxy voting intermediary for major investors, had made significant
errors in reporting votes at its annual shareholder meeting.
Three other directors, including Chairman Roy Bostock, also had
strong protest votes, with nearly 40 percent of votes withheld for
Bostock, 38 percent withheld for director Ron Burkle and 32 percent
withheld for Arthur Kern.
The three are members of Yahoo's compensation committee and have
borne the brunt of criticism for the company refusing to do more to
link executive pay to performance as corporate governance critics have
A fifth board member, Gary Wilson, the former chairman of Northwest
Airlines, had 28 percent of votes on his reelection withheld.
The remaining four board members -- Vyomesh Joshi, Eric Hippeau,
Robert Kotick and Mary Wilderotter -- all received strong endorsements,
with each winning more than 90 percent of votes in favor of their
Ahead of the August 1 meeting, Kotick said he planned to resign
shortly after the meeting as part of a settlement deal with proxy
challenger Carl Icahn in which Icahn and two members of a slate
proposed by the billionaire investor would join an expanded board of 11
members instead of the previous nine.