SUNNYVALE, CA — Yahoo Inc.’s entire board of directors was re-elected August 1st, but not without controversy and recrimination. One major shareholder was so upset with the results of the vote that it demanded a recount.And it turned out, the shareholder was correct that a “vote transmission error” caused votes against the current board to be undercounted. Yahoo admitted the error on Tuesday, saying mistakes were made by the outside vote-tabulation organization.
“These errors did not affect the outcome of the election of directors,” a Yahoo statement issued Tuesday noted. “No errors were reported with respect to the other proposals presented at the annual meeting.”
However, the errors did paint a revised picture of the level of shareholder support for Yahoo’s re-elected board. Instead of at least 78-percent of shareholders backing all nine incumbent board members, the revised figures indicate only about 60-percent of voters supported Chairman Roy Bostock and Chief Executive Officer Jerry Yang. Three other directors saw their support percentages rise after the recount.
Capital Research Global Investors demanded a review Monday, implying there were irregularities in the way its votes were transmitted. The investment group owns 6.2-percent of Yahoo’s stock.
A sister company, Capital World Investors, which owns nearly 10-percent of Yahoo’s stock, did not back Capital Research’s request.
Gordon Crawford, Capital Research’s manager, has been a vocal critic of Yahoo’s board since the company rebuffed Microsoft’s $47.5 bid to take over the search-engine company. Crawford accused Yahoo Chief Executive Officer Jerry Yang and Chairman Roy Bostock of abdicating a fiduciary duty to shareholders when Yang insisted the company was worth more than Microsoft was willing to pay.
In the three months since Microsoft abandoned its bid, Yahoo’s share prices have plunged 32-percent.
Despite some Web-based chatter that Yahoo’s incumbent board may have in some way have exerted influence over shareholders’ votes, Yahoo stood behind the unexpectedly (and, it turned out, undeservedly) positive results.
“Yahoo did not participate in the execution of the votes and was not a party to any errors which may have been made either by a voting institution or a proxy processing intermediary acting on behalf of banks, brokers and institutions,” according to a statement Yahoo released shortly after the annual shareholder meeting.
“We now look forward to executing on our strategy and continuing to build our great company,” Bostock said after the meeting. “Last year, Yahoo’s board of directors and management took steps to thoroughly reexamine the company’s direction and to improve the company’s performance. Since then Yahoo has made significant strides in executing on its strategy, performing particularly well in light of the challenging circumstances of the past six months. Our board looks forward to continuing to work with management to maximize value for all stockholders.”
Yang added, “We are at a unique point in our history, where we have the eyes of the world focused on our company and tracking our performance. We are redoubling our commitment to driving sustained, profitable growth for our stockholders. The value inherent in Yahoo’s unique collection of assets is truly extraordinary, and the progress we’ve made on our initiatives this year signals our ability to capitalize on the underlying potential of these assets.”
Also during the annual meeting, shareholders appointed PricewaterhouseCoopers LLP the company’s independent registered public accounting firm and rejected proposals relating to a pay-for-superior-performance principle for executive compensation, the establishment of policies about internet censorship and the creation of a board committee on human rights.
