Yahoo Renominates Board, Postpones Annual Meeting
Yahoo on Thursday nominated nine of its 10 existing directors for reelection to the company's board, setting the stage for a showdown with dissident investors at its annual shareholder meeting.
In a regulatory filing, the embattled Internet media company postponed its annual meeting from July 3 until later the same month and disclosed two independent investor proposals challenging its executive pay and human rights record.
The company said several shareholders other than billionaire investor Carl Icahn plan to nominate candidates to its board. Yahoo did not identify these new faces and whether they represented a serious alternative slate.
A week ago, financier Carl Icahn launched a campaign to replace Yahoo's board with new directors that would reopen buyout talks with Microsoft, saying the board had acted "irrationally" in refusing the software giant's bid. He has amassed 10 million Yahoo shares and options to buy another 49 million, according to a recent securities filing.
Microsoft walked away from its sweetened $47.5 billion offer for Yahoo earlier this month. The company had initiated an unsolicited bid originally worth around $44.6 billion at the end of January, which Yahoo rejected as insufficient.
In the past week, Microsoft and Yahoo said they were in talks on an alternative deal, but provided no terms. A source familiar with those talks said discussions then involved a plan for Microsoft to buy Yahoo's search business and take a stake in Yahoo, once Yahoo has spun off its Asian assets.
Yahoo said it did not believe that electing the Icahn slate of directors was in investors' best interests and that the other shareholders seeking election to the board had not complied with company bylaws and therefore were ineligible.
In addition, Yahoo's proxy statement disclosed two independent shareholder proposals opposed by the company which will be put before shareholders for the second year running at the July meeting.
The first of these proposals, a "pay for performance" plan, calls for executive compensation at Yahoo to be linked to how well the company performs versus Internet peers. Currently executive compensation is based largely on time served and not conditioned on performance, critics have complained.
A report released last year by shareholder advisors Proxy Governance said that Terry Semel, the company's prior chairman and CEO, stood to take home $170 million from long-term options he received in 2006 alone, a valuation disputed by the company. Current CEO Jerry Yang receives just $1 a year in salary.
Put forward by a Carpenters Union pension fund, a similar proposal won a sizable 34.6 percent of shareholder votes in favor last year versus 62.3 percent against.
A second proposal that asks the board to adopt a company anti-censorship policy and to pay more attention to human rights issues in markets where it is active, specifically China, received only 15.2 percent of votes in favor at last year's shareholder meeting in Silicon Valley.
Cast Of Characters
In addition, Yahoo disclosed that Ed Kozel, one of Yahoo's 10 existing directors, had resigned for personal reasons on May 20. The company said it had no plans to replace Kozel and that its board would shrink to nine members as a result.
Kozel, in a letter to Yahoo, said he had intended to leave the board in February to spend more time with his family, but stayed on after Microsoft made an unsolicited proposal to buy the Internet company, according to the filing.
Two individual shareholders informed the company they plan to nominate themselves to the board, and another shareholder has notified Yahoo of plans to nominate an alternate slate of nine directors, not including himself, according to a filing.
Investors owning Yahoo shares as of June 3 will qualify to vote at the annual meeting. The new record date for filing stockholder proposals is the close of business that day, Yahoo said.
The renominated board slate includes Yang and Roy Bostock, Yahoo's recently elected chairman and a former advertising industry executive, plus seven existing directors who must defend their decision to rebuff Microsoft's takeover bid.
These include supermarket billionaire Ron Burkle, venture capitalist Eric Hippeau, HP printer executive Vyomesh Joshi, media investor Arthur Kern, video game executive Robert Kotick, former airlines executive Gary Wilson and Maggie Wilderotter, an ex-telecoms executive who once headed Microsoft's government sales business.
Icahn's slate of nominees includes himself, Frank Biondi, a former Viacom chief, and Mark Cuban, owner of the Dallas Mavericks basketball team and co-founder of cable network HDNet. Cuban struck it rich after he sold Broadcast.com to Yahoo in 1999 for about $5 billion.