Anticlimax Yahoo Annual General Meeting Results in Few Changes

The Fairmont lobby was nearly empty. Having earlier cut a deal guaranteeing himself a trio of seats in exchange for his silence, agitator investor Carl Icahn didn’t bother showing up. The hundreds, perhaps thousands of freaked out shareholders expected didn’t either and those who did could only offer an empty earful to the board. According to reports in CNET and the New York Times, only a few hundred shareholders and Yahoo employees, joined by an equal number of journalists attended the live meeting.

Surprisingly, all of the board members standing for reelection were reelected. The only major surprise was the withdrawal of former AOL CEO Jonathan Miller whose nomination was blocked at the last minute by TimeWarner. Miller, who many expected would eventually replace Yang as Yahoo CEO, has an active non-compete clause which TimeWarner decided not to waive.

The reelection of Yang, Bostock et al does not necessarily show shareholders have faith in the wisdom of the current board. Shareholders really didn’t have many options. At least Yang’s way shows some sense of direction.

The only alternative candidates came from the slate put forth by Icahn. They had no actual plans to run the company. Icahn and crew bought their stakes in the $23 – $25 range in the hope they would be rewarded with Microsoft monies in the $30 – $33 range. Without a solid commitment from Microsoft the shareholders were left with no winning choices. Investment advisory groups ISS and Egan-Jones reinforced the starkness of the options facing the shareholders when they recommended the reelection of all board members.

Shareholders did direct some of their frustrations on the three board members who served on the compensation committee. Nearly 25% of voters targeted “against” votes at Chairman Roy Bostock, Arther Kern and Ron Burkle. 15% also registered their votes against Yang’s reelection. With most blocks of shares held either by large individual investors or by pension investment funds, such a large number of against votes is considered very high.

Regardless of the number of against votes, Yang vows to remain in place as CEO. It is worth remembering that former Yahoo CEO Terry Semel vowed to stay put after last year’s AGM. He was replaced by Yang a week later.