Revised Yahoo Vote to Show More Disdain for Board
Yahoo is recounting the shareholder vote for its board of directors after discovering that a tabulating firm failed to register the opposition of a major investor.
The revision, expected to be announced later Tuesday, won't change the outcome of Friday's election, which retained Yahoo's incumbent directors despite shareholder anger about the board's handling of a now-withdrawn $47.5 billion takeover bid from Microsoft.
But the change will add a little more punch to the protest against the Yahoo board. The directors re-elected last week had been supported by at least 78 percent of the votes cast, based on the original results.
"It's important for Yahoo's board to understand there is still pressure on them," said Eric Jackson, a hedge fund manager who represents a group of stockholders with about 3.2 million Yahoo shares. "I thought Yahoo's board was kind of let off the hook last week when they didn't really deserve to be."
Capital Research Global Investors, which owns a 6.2 percent stake in Yahoo, lodged the inquiry Monday that resulted in the election recount. Convinced that its opposition to Yahoo's board wasn't reflected in last week's vote, Capital Research demanded an audit from Broadridge Financial Solutions, the processing firm responsible for casting its ballot.
Broadridge acknowledged Tuesday that a printing mix-up caused it to understate the number of shares that Capital Research intended to cast against some of Yahoo's directors. At least 100 million shares were inaccurately voted, according to Broadridge's statement, but no further specifics were provided.
Broadridge processes votes in about 14,000 annual meetings each year, but hasn't found any similar mistakes in a review covering the past 18 months, said Chuck Callan, the Lake Success, N.Y.-based company's senior vice president of regulatory affairs. "This was a unique, isolated incident," he said.
Capital Research spokesman Chuck Freadhoff declined comment Tuesday.
Capital Research's fund manager, Gordon Crawford, has sharply criticized Yahoo CEO Jerry Yang and Yahoo Chairman Roy Bostock for their tactics in the Microsoft talks. Microsoft withdrew its takeover offer, valued at $33 per share, three months ago after Yang demanded $37 per share with Bostock's backing.
Since Microsoft walked away, Yahoo shares have plunged more than 30 percent to leave the company's market value nearly $20 billion below the last takeover offer. Yahoo's stock gained 42 cents to $19.80 in Tuesday's late afternoon trading.
Yang was backed by 85 percent of the shareholder votes counted in the results announced last week, while Bostock received support from nearly 80 percent of the ballots.
The board is about to be expanded to 11 people, to include activist investor Carl Icahn and two of his allies. Icahn hopes to revive talks with Microsoft.