Yahoo shareholders leave meeting disgruntled
Executives at the Internet pioneer are probably breathing easier now that the shareholder meeting is over. But several shareholders aren't happy with how it went.
SAN JOSE, Calif.--Yahoo stuck to its script Friday, arguing at its annual shareholder meeting that it's poised for greater financial success, but at least some shareholders left unsatisfied with the performance by Chief Executive Jerry Yang and Chairman Roy Bostock.
"I like Jerry, but I think a new CEO is needed," said Eric Jackson of Ironfire Capital, which controls 3.2 million Yahoo shares, in an interview after the two-hour meeting here wound down. And that's not all--he also wants to see board members Bostock, Eric Hippeau, Arthur Kern, and Ron Burkle step down. And he wants to see Yahoo cut jobs and exit some businesses.
It's virtually certain Yahoo's existing board will be re-elected, but that doesn't mean the company can consider the matter over. Last year, a large fraction of shareholders withheld their votes from board members, and a few days later, former CEO Terry Semel resigned and Yang took over.
When Jackson suggested that last year's vote means Yahoo needs to change, Bostock replied, "I think this year's vote is probably more relevant." Perhaps Bostock was deflecting the question, but perhaps he's more confident that there actually has been progress in the last year.
Jackson also said he was unhappy that shareholders didn't get to vote on a new Yahoo board. Robert Kotick is stepping down, to be replaced by Carl Icahn on Monday, then by August 15, the board will name two new additions who will swell its ranks to 11 members.
"It would have been nice if they announced other directors were leaving or announced the Icahn nominees," Jackson said. The shareholders should have been able to vote on the new membership instead of a team that will only last two weeks. As it stands, shareholders will have to wait nearly a year to have their next say. The arrival of Carl Icahn is "a good development, but I don't think he's the full solution."
Patrick Sheridan, who came from New York for the meeting, was unhappy that.
"We might not see $33 again for two years," he said. "I might have to cut my losses. I voted against the entire board."
Yahoo stock closed at $19.80 on Friday, not far from its $19.18 price the day before Microsoft announced its unsolicited and not-so-friendly acquisition proposal. The shares rose to near $30 in the days after the attempt.
Similarly disgruntled was Dan Strickfaden, who flew out from Texas to see the fireworks only to find the meeting relatively unconfrontational. He said he liked presentations by Yang and President Sue Decker, but believes the company will have hard times weathering the next few months.
Strickfaden also hoped for a new CEO.
"I think Jerry and David (Filo) are to be congratulated for what they've created. But I don't think Jerry is the guy for the day-to-day CEO role," Strickfaden said. "It's too bad (former Intel CEO and Chairman) Andy Grove isn't 30 years younger."
Bostock said 2008 is a year of investment for Yahoo--translate that to tepid financial results as the company tries to get its act together for the future.
"The next six to twelve months is a reasonable time frame to achieve greatness," Strickfaden said. "It's a separate question whether they can do it. That remains to be seen."
Still some faith in Yahoo
Carl Nagata, who has held Yahoo shares for the past five years and came to the meeting with his wife and two of his three children, bought his shares at $24 apiece for his children. Despite the recent trouble the company and its share price have encountered over the past year, Nagata said he plans to accumulate more shares.
"The company shared their strategic vision, and it's clear they're focused on their strategy," Nagata said.
Anthony Mezzapelle, who snapped up Yahoo shares on the day it went public, said he's still bullish on the company's prospects, though less so on Yang running the company as CEO.
"I would like to see a new CEO," Mezzapelle said. "I think a co-CEO arrangement would be excellent."
He added he was not disappointed when Yahoo passed on the sweetened $33 a share buyout offer from Microsoft and believes the company is worth more than that offer. He also said that he'd like to see Yahoo pursue an aggressive strategy in Europe and Latin America to gain market share.
Investor Ron Kline, who has held shares since 2000, characterized the message from Yahoo's board and management as it's more of the same.
"All these things were the same things they were talking about three years ago," said Kline.
CNET News staff writer Dawn Kawamoto contributed to this report.