The Yahoo Shareholder Vote: Like Florida, Except More Confusing!
by Kara Swisher
Posted on August 5, 2008 at 6:50 AM PT
All Yahoo needs now is for former Florida Secretary of State Katherine Harris to show up and start recounting votes.
It could happen, given all the crazy characters who have been drawn to the much-beleaguered Internet company like a magnet, in 2008.
It’s almost as if there is a voodoo curse on Yahoo (YHOO).
So, you didn’t think the digital gods would let it have more than one weekend of good news, did you?
No, they will not, it seems.
After the annual meeting last Friday, which went off without a hitch and, more importantly, without an expected major shareholder vote against the company’s management and board, you could feel a palpable easing of tension among Yahoo leadership and its exhausted PR team.
By Monday, the Yahoo shareholder kerfuffle–in essence, one major shareholder of Yahoo has asked for its outside tabulator of investor votes at the annual meeting for a recount–had landed with a thud.
The problem is how shares were tallied in the Yahoo annual meeting, specifically around whether a group of votes withheld by Capital Research Global Investors was not counted, counted incorrectly or even voted incorrectly by the investor.
Parent company Capital Research & Management confirmed that it had asked Broadridge Financial Solutions, a Lake Success, N.Y.-based financial services company that does securities clearing and processing, to investigate whether those votes were correctly counted on behalf of its Capital Research Global Investors fund.
Capital Research Global Investors–one of two funds separately managed at Capital Research & Management–owns 6.5 percent of Yahoo, according to recent filings, and Capital World Investors owns 9.8 percent.
Capital Research Global Investors is run by legendary media investor Gordon Crawford (pictured here), who has become disenchanted with Yahoo over the last year.
Because of that, sources close to the fund’s thinking said Crawford had recommended that the fund withhold votes from CEO Jerry Yang and some other board members.
It’s not clear whether that actually happened or, if it did, whether the votes were tallied properly.
That’s because Yang, for example, only had 14.6 percent withheld, with 85.4 percent voting for him.
The votes withheld seemed low to Capital, considering Crawford’s large stake and how many shareholders have been deeply unhappy with Yahoo management this year.
Instead, overall results for Yang and the Yahoo board were mostly better than last year.
Everyone is investigating, of course–from Capital Research to Broadridge to Yahoo, which does not do its own tabulation, although it has hired an outside proxy solicitor to manage the process–to try to find out what’s what.
It is likely there’s a nonsinister reason for the voting results.
And there might be a lot of possible explanations, but I am partial to blaming the confusion that followed after activist investor Carl Icahn pulled his proxy fight a week before the meeting and made nice with Yahoo.
Unfortunately, Icahn’s golden proxy ballot was already in the hands of investors, many of whom might have voted for it and then had that vote essentially voided.
Wrote one BoomTown reader and Yahoo shareholder:
“I hold 23,000 shares of YHOO. I had 17,000 on the date of record. I voted to ‘withhold all’ … I think twice. Then I voted for all of Carl’s team. Now I have learned that the Carl votes did not count and a day AFTER the annual meeting I received my new ballot. I wonder how many other people were disenfranchised??? Who can I complain to?? Is this how Jerry got his support??”
Another commenter on the site also wrote:
“As a stockholder, I was curious *which* of my proxy letters actually was counted–I received four. One was from Icahn, the other three were from Yahoo. The last of which arrived today, August 4th. Does this strike anyone as odd?”
Actually, Yahoo’s twisting journey passed odd a long time ago and is now headed toward “The X-Files” territory.
(So let’s all triple-hope Yang’s upcoming trip to China for the Olympics goes smoothly. Have a good time, Jerry, we’ll be back here counting!)
Comments
Interesting how people continue to have difficulties accepting results when they don’t get what they wanted. Only because many of us shareholders don’t roam the Media doesn’t mean we don’t have a voice. Why do you – major sharholders – not like to hear our voice? Aside from thinking “share price” we also think “community” that is of value when reviewing our engagement with Yahoo! Why does Microsoft want Yahoo! – Answer: Because of the user base, the millions of people producing millions of page views,valuable ads inventory. If Yahoo goes to Mr. Softy, people, the community, the value, will instantly go away. Did you hear how individual shareholder characterized Mr. Softy at the meeting? Why is it so difficult to accept a vote? Does democracy count for anything in this country? it better!
Posted by Mo Yi at August 5th, 2008 at 10:59 amI voted the yellow proxy for Icahn’s slate to replace Yahoo’s board of directors. The day after the annual meeting and vote, I received in the mail a letter from Yahoo stating that the yellow proxy would be discarded as a result of the settlement with Icahn. Also, included was a new white proxy to vote. Problem was that this was received AFTER THE VOTING HAD TAKEN PLACE! Another ‘coincidental accident’?
Posted by dave storm at August 6th, 2008 at 11:41 am