“Embattled CEO Jerry Yang and other Yahoo official’s won huge shareholder support in vote.”
San Jose, Calif. — Jerry Yang and the Yahoo Inc.’s board while taking some heat at the company’s annual shareholders meeting Friday, with attendees bombarding with questions on numerous issues, largely emerged unscathed and won strong support from shareholders, with Jerry Yang, the company’s embattled CEO, receiving 85 percent of the vote in his favor.
While some shareholders took issues whether the executives should be making as much money as they do, demanding why Yahoo remains to trail behind Google in search, showing concern over the failed Microsoft deal, requesting resignations, and also giving the company a hard time on its China policy.
“The leaders at Yahoo’s helm stood firm — though they said they are still puzzled why Microsoft walked away.”
Some shareholders showed dissatisfaction by opposing the re-election of Yahoo’s current directors, but the opposition was not as intense as last year, when three directors were rejected by more than 30 percent of the vote.
At this year’s voting, only two directors — Chairman Roy Bostock and Arthur Kern — were opposed on ballots constituting at least 20 percent of Yahoo shares. Yahoo Chief Executive Jerry Yang, who headed the Microsoft negotiations with Bostock, was approved by 85 percent of the votes cast.
Investors controlling nearly 76 percent of Yahoo’s 1.38 billion shares gave solid votes in favor of all nine current directors, in what represents an approval of their tough stance with Microsoft Corp. in talks on a merger or partial sale.
Executives and board members attempted to pacify protesting 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 terminating the talks, Chairman Roy Bostock said Yahoo’s board “called the shots” when examining Microsoft’s proposals, including a $47.5 billion bid and attempts to buy Yahoo’s Web search business.
Bostock said he could not comprehend why the software maker withdrew its bid. “There was never a compelling offer put on the table,” he said. “That never occurred in this process.”
A Microsoft spokesman disputed Bostock’s version of events, saying “Yahoo is attempting to rewrite history yet again.”
Bostock gained about 80 percent of the votes and was re-elected, Yahoo said today in a statement after its annual meeting in San Jose, California. Icahn was appointed to the board after the meeting.
The vote allows Yang a back-up as he seeks to revive Yahoo’s revenue growth and stock price after the company rejected a $47.5 billion offer from Microsoft Corp. While Yahoo still trails Google Inc. in Internet search users and advertising, Yang said today that his company is closing the gap.
“Yahoo still has pressure to improve its stock,” said Colin Gillis, an analyst at Canaccord Adams Inc. in New York. “They have known this day was going to come and go.”
Many shareholders had already made a categorical statement about their thoughts by dumping their holdings in Yahoo shares. The company’s stock price has fallen by 31 percent since Microsoft withdrew a takeover offer of $33 per share in early May.
Much of the tragedy was sapped from Friday’s meeting last month when Yahoo reached a treaty with activist investor Carl Icahn, who had been campaigning to oust the company’s entire board for rejecting the Microsoft bid.
Icahn, who owns a 5 percent stake in Yahoo, will join the company’s board next week and henceforth cannot criticize his fellow directors as part his peace pact. He did not attend Friday’s meeting.
Yahoo will expand the board to 11 members from nine to add two other Icahn-endorsed nominees to the board by Aug. 15, as part of an agreement announced last month to appease the investor. Former AOL CEO Jonathan Miller had been considered one of the leading candidates to fill the other seats, but he apparently will be precluded from doing so as part of a non-compete agreement that AOL’s owner, Time Warner Inc., plans to enforce.
“The conditions stopping Miller from joining an AOL competitor remain in effect through March 2009, Time Warner spokesman Keith Cocozza said Friday.”
Miller has been mentioned as a possible successor to Yang, who has been unable to boost the company’s market value during the first 13 months of his reign.
“Yahoo spokeswoman Diana Wong declined to comment on Miller’s status.”
A handful of shareholders at the meeting attacked the board and management, highlighting dissatisfaction that has hurt the stock since talks on a full Microsoft merger broke up in May.
Quite certainly, it was maverick investor Eric Jackson who was holding the stage, detailing his discontent with current management and why he still is in favor of the Internet giant doing a deal with Microsoft.
Jackson leads a group of 146 investors who jointly hold 3.2 million Yahoo shares, he said, seizing the opportunity to reiterate his displeasure over Chief Executive Jerry Yang and the current board of directors.
“I’m frustrated and it is not just about Microsoft,” he said. “We have been asking for a plan for the past four years, but there is no indication the company can execute. I do not think [Yang] is the right CEO. They need an outsider and new people around the table.”
Others revived their demands for Yahoo to do more to protect the human rights of users in authoritarian countries such as China, after Yahoo was widely criticized for handing over e-mails to authorities that they used to jail political dissidents.
The second subject came up during a question-and-answer session with investors after Yahoo successfully urged shareholders to vote against proposals that would require the company to establish policies on Internet censorship and create a committee on human rights.
Regardless of the failure of those two proposals, chief executive Yang insisted that Yahoo is “a leader now in Internet human rights efforts.”
The meeting may have frustrated many people who had expected a fight between Icahn and the board, Gillis said.
“The event of the summer was a nonevent,” Gillis said. He has a “hold” rating on the stock.
Yahoo’s greatest challenge is still ahead, given that its stock price is just slightly above where it stood six months ago when Microsoft first announced its unsolicited takeover offer.
Yang, who co-founded Yahoo 14 years ago, promised investors his management team is pursuing a turnaround plan in “a very deliberate and forceful manner.” Yang has assured to increase Yahoo’s net revenue by at least 25 percent in each of the next two years.
Bostock loyally defended the board’s handling of the Microsoft negotiations, saying the directors met more than 30 times to discuss the bid as well as other ways to elevate the company’s stock.
“At no point did this board or management in any way ever resist Microsoft’s proposal,” Bostock told shareholders. “We proactively engaged with them and tried to reach a positive conclusion for shareholders.”
He also cast doubt about the validity of Microsoft’s last offer, saying it was made in an “offhand comment.”
Microsoft has firmly asserted that its general counsel specifically told a Yahoo lawyer that the Redmond, Wash.-based software maker would pay $33 per share.
In a statement Friday, Microsoft maintained that “Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts.”
Former Yahoo employee Martin Baker, who still owns 100 shares, was mostly upset that the company did not establish more time for shareholder questions. After Yahoo’s leaders spent more than an hour defending its handling of the Microsoft offer and management’s optimistic outlook, the company allotted about 35 minutes to field nine questions.
“It seemed like they were more interested in going to lunch than hearing from shareholders,” said Baker, a San Francisco resident. “I think they controlled things pretty well.”
Only two of the approximately 125 investors at Friday’s meeting criticized the Microsoft negotiations. Two other shareholders said they were happy Yahoo did not sell to Microsoft.