Investors faithful to Yahoo board
- Share via
SAN JOSE — After six months of fireworks as a takeover battle for Yahoo Inc. raged, the Internet company’s annual meeting Friday produced little spark and few questions about the board’s controversial decision to spurn Microsoft Corp.’s advances.
Despite deep disappointment in the management and direction of Yahoo, investors voted overwhelmingly to re-elect the board, with 85% of ballots supporting Chief Executive Jerry Yang and 80% backing Chairman Roy Bostock.
Shareholders representing nearly 76% of Yahoo’s 1.38 billion outstanding shares voted for all nine of the directors. About 153 million shares were withheld for Yang’s reelection.
The endorsement suggests that investors are either giving Yahoo another chance or giving up on the stock. The company’s shares have fallen 31% since early May, when Microsoft withdrew its $33-a-share takeover bid.
Shares of Sunnyvale, Calif.-based Yahoo fell 9 cents Friday to $19.80.
“Investors seem to have realized that the business Yahoo is in is a very complicated and challenging one, and the current macroeconomic environment is even more challenging,” said analyst Anthony Valencia of TCW Group in Los Angeles.
“So turning over the reins to an unknown quantity doesn’t appear to be the prudent thing to do at the moment.”
Yang assured the 125 shareholders attending the meeting that Yahoo was in the middle of a “massive” transformation that would position the company to reap a greater share of online advertising revenue.
Bostock defended the board’s handling of negotiations with Microsoft, saying the software giant never made a “compelling” offer for his company.
“At no point did the board and management ever resist Microsoft’s proposal,” he said.
Yahoo has repeatedly rejected Microsoft’s offers to buy all or part of the company.
The Internet company recently defused some tension by declaring a truce with investor Carl Icahn, who sought to oust the board and gain control of Yahoo. Icahn, who did not attend the meeting, will join the board next week.
The board will expand to 11 members to make room for two of Icahn’s nominees. The new directors will be named by Aug. 15, the company said. Leading the consideration are former Nextel Partners chief John Chapple, former Viacom Inc. CEO Frank Biondi Jr. and former Grey Global Group CEO Edward Meyer.
Former AOL Chairman and CEO Jonathan Miller was considered a shoo-in for one of the slots until Friday, when Time Warner, AOL’s parent, invoked a noncompete agreement that forbids him from working for rival Internet companies until March.
Time Warner initially agreed to allow Miller to join the board, then reversed course, according to people familiar with the situation. Time Warner denied having given Miller the initial approval.
Bostock triggered another war of words with Microsoft when he said the Redmond, Wash.-based company never formally offered $47.5 billion for Yahoo. Microsoft maintains that its general counsel made the offer to a Yahoo lawyer.
“Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts,” Microsoft said.
Criticism of Yahoo’s handling of the Microsoft negotiations was sparse Friday; a few shareholders even expressed support for the board and management. Other investors questioned Yahoo about its human rights practices in China and its executive compensation policies.
However, activist Eric Jackson, representing 3.2 million shares, asked Bostock to step down.
“You are overpaid, you have overstayed your welcome, you overplayed your hand with Microsoft,” Jackson said.
Bostock declined.
--
Times staff writer Joseph Menn contributed to this report.
