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Yahoo board reelected despite failed takeover deal

Latest update : 2008-08-02

The Yahoo board has been re-elected after a berating from shareholders for the company's failure to follow through on negotiations with Microsoft for a buyout earlier this year.

Yahoo executives were resoundingly re-elected Friday after being berated by shareholders over failed takeover talks with Microsoft and for exposing Internet dissidents to Chinese officials.
  
Yahoo chief executive Jerry Yang got 85.4 percent of the votes cast by shareholders while board chairman Roy Bostock got the support of 79.5 percent of the shareholders.
  
The weakest support was shown for incumbent Arthur Kern, who won 77.9 percent of the votes.
  
"It does look like they have support of the shareholders again, but at the end of the day they have to focus on the company goals and execute," said analyst Rob Enderle of Enderle Group in Silicon Valley.
  
The votes were tallied after Yang and Bostock, two key players in drama-filled negotiations with Microsoft, faced approximately 150 shareholders in a hotel ballroom in downtown San Jose, California.
  
Voices of support and criticism rose from the gathering, with one shareholder calling for Bostock to resign and another praising Yahoo for saving the firm from "over-the-hill green-tentacled octopus" Microsoft.
  
"I think you overpaid on compensation; I think you overplayed your hand with Microsoft, and I think you overstayed your welcome after last year's vote and should do the honorable thing and step down from this board," stockholder Eric Jackson of Ironfire Capital said during comments from the gathering.
  
Bostock responded to Jackson with a "No."
  
"With all the hoopla, with all of the publicity that has surrounded the company in the past six months there has been a great deal of misunderstanding," Bostock told the gathering.
  
"The board controlled the process of dealing with Microsoft right from the beginning. We called the shots and were deeply involved in every step."
  
Bostock said the Yahoo board never resisted Microsoft's proposal to buy Yahoo and that it was the US software giant that capriciously walked away from negotiations.
  
Microsoft on January 31 offered to buy Yahoo for 44.6 billion dollars in a half-cash, half-stock deal.
  
Microsoft walked away from negotiations May 3 after Yahoo rejected an offer it raised from 31 dollars to 33 dollars per share, which amounted to 47.5 billion dollars.
  
"Yahoo is attempting to rewrite history yet again with statements that are not supported by the facts," Microsoft said of the Yahoo presentation.
  
Shareholder Matthew Rafat said blaming failed talks on Microsoft reminded him of a romantic break-up.
  
"A girlfriend who was involved in a breakup is now trying to convince the world she was the initiator and not the victim," Rafat said, drawing laughter from stockholders.
  
Yahoo executives promised that the struggling Internet pioneer remained on course throughout the Microsoft drama and is poised for more profitable days ahead.
  
"We've been rewiring the company," Yang told stockholders that had been plied with coffee, pastries, juice and fresh fruit. "This is a very global business and Yahoo is very well positioned."
  
While the failed Microsoft courtship was expected to dominate the gathering, shareholders expressed more concern over Yahoo's human rights record.
  
"Yahoo has a sad history of complicity with violating human rights by turning over information to the Chinese government," said shareholder John Harrington. "What we need to do is get our house in order."
  
Yang and Bostock defended Yahoo, saying it has become a champion of online human rights but that ultimate safeguards must come from governments working together on the issue.
  
Yahoo avoided an ugly show-down with corporate raider Carl Icahn, whose campaign to overthrow the board was ended by a truce that gains him three seats.
  
"They have their biggest critic now on their side," Enderle said. "Icahn is in a better position to force some changes."
  
One stockholder referred to Icahn and his yet-to-be announced allies on the board as "the gang-of-three" and dismissively said all the board members "deserve each other."
  
"We decided to avoid a looming proxy battle with Carl and, frankly we are looking forward to (working with him)," Bostock told shareholders.
  
"He is a smart guy and some say a good guy, despite the things that are written about him."
  
Yahoo's stock price slipped slightly to 19.78 dollars per share in afterhours trading.

Date created : 2008-08-02

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