When Yahoo held their shareholders meeting and votes were cast for the Jerry Yang and company, they won pretty conformably and it was taken as a sign that the shareholders were more or less rallying behind the board and believed in their vision.
Turns out that might not be completely true.
ValleyWag is reporting that Capital Research & Management, the group responsible for tallying the shareholder votes, omitted tens of millions of votes, way more than enough to skew the results.
The new, corrected totals, paint a pretty bad picture for Yang with the percentage of votes withheld from him jumping from 14.6 to 33.7 percent. Yahoo chairman Roy Bostock has his own bad news to deal with, with the percentage of votes withheld from him jumping from 20.5 to 39.5 percent.
Does that mean that Yang and Bostock will be stepping down?
Yahoo held their annual meeting with their shareholders and contrary to what some people believed before the meeting, the shareholders voted strongly in favor of CEO Jerry Yang and Yahoo’s board of directors with Yang receiving 85% of the vote in his favor.
That’s not to say that everyone is happy with Yang and the board. A small group of investors that collectively own 3.2 million shares criticized the board during the meeting, saying that they have hurt the stock price since.
One of them, Eric Jackson, said “I think you have overpaid in terms of executive compensation, overplayed your hand with Microsoft and overstayed your welcome on the board.”
Another investor asked to know more about how much time Yahoo directors worked to earn their pay.
After Microsoft withdrew their bid to acquire Yahoo, there were apparently high-fives in the Yahoo boardroom. They had weathered the storm.
Not so happy.
After Yahoo’s stock dropped on Monday, several prominent investors expressed their dissatisfaction with how Yahoo CEO Jerry Yang and the board handled things, forcing Yang to backpedal.
“We did not say it was a take-it-or-leave-it number in the sense that we would never negotiate any more,” said Yang, referring to the $37 per share figure. “We were totally willing to do a transaction, and they walked away.”
Capital Research Global Investors portfolio manager Gordon Crawford told the Wall Street Journal “I’m extremely disappointed with Yang…I think he overplayed a weak hand.”
A Yahoo board member was allegedly overheard venting on a telephone call about Yang’s performance saying “I’m done with this ego trip shit, he’s out.”
After Microsoft’s announcement that it was officially withdrawing its bid to acquire Yahoo and that it would not attempt a hostile takeover, shares of Yahoo fell 22 percent ($6.34) to $22.33 in premarket trading.
In Frankfurt, Germany, two hours before trading opened in New York, shares of Yahoo had falled 18.6 percent to 14.74 euros ($22.79 US).
On the flip side, Microsoft’s shares rose 4.3 percent to $30.50 in premarket trading.
S&P equity analyst Scott Kessler says that “this squarely puts the pressure on Jerry Yang to deliver results and shareholder value..you are going to see a lot of shareholders just throwing in the towel because they are going to realize it’s going to take a while for the stock to get back to where it was Friday.”
“Clearly there’s frustration,” said Darren Chervitz, co-manager of the Jacob Internet Fund, which owns Yahoo stock. “I am not even sure if Yahoo cares about its shareholders because they didn’t show much regard for shareholders’ best interests in this process.”
More fallout is likely still on the way as Yahoo will likely face more lawsuits from shareholders.
If Microsoft’s public response to Yahoo! turning down their acquisition deal was supposed to rile up Yahoo! shareholders it looks like it worked.
A group of Yahoo! investors have jointly filed suit against Yahoo! claiming that the company failed to enter into substantial negotiations with Microsoft before rejecting the deal.
This suit joins a previously filed class-action suit against Yahoo! for quietly turning down a Microsoft buyout offer last year, alleging that the offer was turned down so that he board members could hold on to their cushy salaries.
No comment from Yahoo.
[Via CNET News]