Yahoo investor urges board compromise with Icahn
SAN FRANCISCO (Reuters) - Dissident Yahoo Inc investor Eric Jackson urged fellow shareholders on Monday to vote for a board comprising five existing directors and four nominees from billionaire investor Carl Icahn's slate.
Jackson, who leads a group of 146 investors holding 3.2 million Yahoo shares, said that, while he supported Icahn fully, he recognized that major shareholders may not. So he proposed a "third option" to create a new board that is more responsive to shareholders' concerns.
Icahn, who owns more than 4 percent of Yahoo, launched a proxy battle in May to replace the Web pioneer's board in the wake of Microsoft Corp's failed effort to acquire the company.
"Neither side running for election can guarantee that Microsoft will ever come back to the table with an offer for Yahoo," Jackson said in a statement first published on TheStreet.com. "We must accept that reality and select a board to do the best job in the current situation (even as distasteful as the situation is).
"I want Icahn to win outright, but I am putting forward this "Third Option" because I fear several large shareholders will worry about the operational abilities of Icahn and his team."
Jackson said his move was aimed at major Yahoo shareholders, including Capital Research, Legg Mason and Vanguard, as well as proxy advisory firms such as RiskMetrics and Glass Lewis. (Click on tinyurl.com/5qz5cz for more details.)
Yahoo last week signed a Web search advertising deal with Google Inc after talks with Microsoft broke down. The news sent Yahoo shares plunging more than 17 percent.
Icahn told Reuters in an interview on Sunday that, while the Google deal is not the same as a buyout offer from Microsoft, it might have some merit. The billionaire investor declined to say if he would continue to press his proxy battle.
RECOMMENDED CHANGES
Jackson became the star of Yahoo's 2007 annual meeting when he accused then-chairman and CEO Terry Semel of mismanaging the company and failing to do more to revive its falling stock price. He also spearheaded a campaign against board-nominated directors, resulting in a hefty minority vote against the reelection of Semel, who stepped down soon after.
In May, Jackson launched a "vote no" campaign, reaching out to Yahoo shareholders via the Internet to urge them to vote against Yahoo directors.
Jackson said on Monday that the three members of Yahoo's compensation committee, including Chairman Roy Bostock, and a fourth director, Softbank Capital's Eric Hippeau, should not be reelected
.
"I frankly hold Mr. Bostock more responsible (than Yahoo CEO Jerry Yang) for the break-down in talks with Microsoft," wrote Jackson, who runs investment firm Ironfire Capital and personally owns only a handful of Yahoo shares.
"He supposedly has much more experience in such deal-making matters than Yang," Jackson wrote "and I find it puzzling that he would choose not to attend that fateful meeting on May 3rd in Seattle, which led to Microsoft finally pulling the plug on their offer." Continued...
