Yahoo shareholder vote disputed, altered
Capital Research Global Investors, which owns 7% of Yahoo, publicly questioned on Monday the validity of the announced results from Yahoo’s shareholder vote. And they were right to be skeptical.
Capital Reseach and the Capital World Investors control a combined 17% of Yahoo’s shares and recommended to its fund managers that they withhold votes for Yahoo CEO Jerry Yang.
However, initial results purported that 85% of shares were voted in favor of Yang last Friday.
I’m all for giving 110%, but something here doesn’t add up (read the AP story from Tuesday morning here).
By mid-day Tuesday, the proxy vote processing firm Broadridge Financial Solutions announced that 100 million votes had been inaccurately counted, but gave limited details (read the AP update here).
And by Tuesday evening, Broadridge had announced that a stunning 200 million votes had been processed incorrectly (read the latest from the AP here).
CEO Jerry Yang saw his support plummet from 85% down to 66%. Chairman Roy Bostock similarly fell from 80% down to 60%.
Other directors also saw support fall: Ron Burkle (81% down to 62%) and Arthur Kern (78% down to 68%). Burkle and Kern, along with Bostock, sit on Yahoo’s compensation committee which approved large severance packages in February after Microsoft’s unsolicited bid, creating a de facto poison pill.
The fallout here could be worse than simply had the vote tallies been announced correctly, with shock toward the magnitude of the miscalculations and the implication (improper, of course) that Yahoo somehow manipulated the vote.
Having reached a “settlement” with Carl Icahn and having received overwhelming support (in the initial result) from Yahoo shareholders, Yang looked to be on an upward streak.
Now, expect on barrage of calls and demands for Yang to step down.
