New Yahoo Election Tally Reveals Big Protest Vote
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Yahoo Inc on Tuesday released a recount of the vote for its board that sharply altered the results, revealing a strong protest vote against five of nine directors including CEO Jerry Yang.
The Internet company said revised vote tallies showed 33.7 percent of votes withheld for Yang, the company's co-founder, with 66.3 percent in favor of him remaining on its board.
It was originally thought that Yang had been reelected with 85 percent of the vote.
Yang has been under pressure for months over failed attempts by Microsoft Corp to buy the company and over questions about his leadership, but Friday's shareholder vote had suggested the tide was turning in his favor. The initial tally showed 85 percent of votes going to Yang.
The stunning new twist in the saga of Yahoo came after one its largest and most critical shareholders, Capital Research Global Investors, called on Monday for a probe of last week's shareholder vote after finding discrepancies in the results.
Yahoo said it had been informed by Corporate Election Services, the company's inspector of elections, that Broadridge Financial Solutions, a proxy voting intermediary for major investors, had made significant errors in reporting votes at its annual shareholder meeting.
Three other directors, including Yahoo Chairman Roy Bostock, also had strong protest votes, with nearly 40 percent of votes withheld for Bostock, 38 percent withheld for director Ron Burkle and 32 percent withheld for Arthur Kern.
The three are members of the company's compensation committee and have born the brunt of criticism for the company refusing to do more to link executive pay to performance as corporate governance critics have demanded.
A fifth board member, Gary Wilson, the former chairman of Northwest Airlines, had 28 percent of votes on his reelection withheld.
The remaining four board members -- Vyomesh Joshi, Eric Hippeau, Robert Kotick and Mary Wilderotter -- all received strong endorsements, with each winning more than 90 percent of votes in favor of their reelection.
Ahead of the August 1 meeting, Kotick said he planned to resign shortly after the meeting as part of a settlement deal with proxy challenger Carl Icahn in which Icahn and two members of a slate proposed by the billionaire investor would join an expanded board of 11 members instead of the previous nine.
Gordon Crawford, whose Capital Research Global Investors owned 6.2 percent of Yahoo as of early June, said in May he was "extremely angry" at Yang over the breakdown of talks with Microsoft.
Critics of corporate voting technology have called for a system overhaul, said the counting process was complicated and lacking in transparency.
In a statement, Broadridge acknowledged the error, but said it was an isolated incident and that it did not change the outcome of the election of the company's directors.
"Upon review, it was determined that there was a truncation error in the final printout sent to the tabulator," said Chuck Callan, Broadridge's senior vice president of regulatory affairs. "This resulted in the under-reporting of shares withheld for certain directors," he said.
Shares of Yahoo gained 2.3 percent to $19.82 in regular session trading on NASDAQ amid wide gains in the broader market but edged down 3 cents to $19.79 in extended trade following announcement of the revised title.