Glass Lewis argues against three Yahoo directors

NEW YORK (Reuters) - Proxy adviser Glass Lewis & Co is recommending that Yahoo Inc (YHOO.O) shareholders vote against Chairman Roy Bostock and two other directors, and expressed concern over a deal to place activist investor Carl Icahn on its board.

Glass Lewis noted that Bostock, Ron Burkle and Arthur Kern were on Yahoo's compensation committee in 2007, when the company increased pay for its executives even as it performed worse than its rivals, according to a report obtained by Reuters on Thursday.

Yahoo reached a deal with Icahn earlier this week to expand its board to 11 members, agreeing to let him and two of his nominees join and averting a proxy battle at the company's August 1 annual meeting.

Glass Lewis said the fact that Icahn already serves on seven public company boards was a cause for concern.

"We believe that the time commitment required by this number of board memberships may preclude Mr. Icahn from fulfilling his responsibilities to this company's shareholders," the report said.

"We believe shareholders should monitor Mr. Icahn's ability to devote sufficient time and attention to the company."

Icahn launched a proxy battle against Yahoo in May to bring the Internet pioneer back to the negotiating table with Microsoft Corp (MSFT.O).

While many Yahoo shareholders sought a deal, Microsoft had abandoned interest in buying all of Yahoo since talks over a $47.5 billion buyout of Yahoo collapsed in May.

But at least one major Yahoo shareholder, Legg Mason fund manager Bill Miller, declined to back Icahn.

(Reporting by Michele Gershberg; Editing by Lisa Von Ahn)