04 August 2008

Yahoo! board emerges from shareholders meeting unscathed

Yahoo!'s Chief Executive Jerry Yang won the backing of 85% of investors at Yahoo!'s general meeting, which took place in California last Friday, despite some investors criticising the firm's failure to agree to a deal with Microsoft despite offers peaking at $47.5.billion (£24.1 billion) for the company.

150 investors attended the meeting at the Fairmont Hotel in San Jose, with one of them, namely Eric Johnson of Ironfire Capital, calling for the resignation of Yahoo! chairman Ray Bostock, who was accused of overplaying his hand with Microsoft. Rebuking these claims, Mr Bostock said that there had been "a great deal of misunderstanding" regarding Yahoo's dealings with the software giant, going on to say that "The board controlled the process of dealing with Microsoft right from the beginning. We called the shots."

While most of the 800 seats set aside at the Fairmont hotel were empty, one investor who was notable by his absence was billionaire Carl Icahn, who had previously threatened to replace the Yahoo! board at the Annual General Meeting. Microsoft first offered to buy Yahoo! in January and eventually walked away from negotiations in May after Yahoo! rejected an improved offer. Icahn bought millions of shares in the company after criticising Yahoo! for letting Microsoft walk away from the table and threatened a proxy fight to replace the board with his own hand-picked team. Ultimately, a private deal was arranged between the two parties, with Icahn accepting seats on the Yahoo! board for himself and two others who will be named in a couple of weeks.

Mr Icahn explained his decision not to attend the AGM in his blog, stating "It will not do shareholders or Yahoo! any good to have the annual meeting turn into a media event for no purpose."

His placement on the Yahoo! board did not please shareholder Dirk Neyhart, who told the BBC, "His view is that he is making better companies, more efficient companies. My view is that I look at his background and see if he drives a stake into the soul of the company."

Company founder and CEO Jerry Yang also faced criticism from shareholders on the subject of human rights. Several shareholders expressed concern at an incident which occurred in 2007 when Yahoo! allegedly assisted the Chinese government in indentifying a political dissident, leading to his imprisonment and torture. In response Yang said, "I have personally been involved in discussing how we can improve human rights with just as many people as you can imagine."

Despite this, Tony Cruz of Amnesty International, also a Yahoo! shareholder, told the BBC his not convinced by Yang's words, suggesting that Yahoo! and other companies have compromised their principles for financial gain.

Mr Cruz said, "There was a quote that said by 2012 the Asia Pacific rim market will be worth $800 billion and they (Yahoo!) want a piece of that."

"They are giving up a part of their value system to get into this market. We just want to see a corporation actually stand up and do what is right. And we haven't seen that yet."

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