Shareholder approval of Yahoo board plunges on vote recount

A corrected vote tally reveals dissatisfaction with Yahoo board members is much greater than thought after Friday's shareholder meeting.

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2 min read

The shareholder approval ratings for Yahoo Chief Executive Jerry Yang and Roy Bostock plunged Tuesday after Yahoo released new results that corrected a vote transmission error.

Shareholders unhappy with board members withheld their votes in the Friday election. In Yahoo's official voting tally released Friday, 14.6 percent of votes for Yang and 20.5 percent for Bostock were withheld.

But in the corrected results, Yang's withhold percentage rose to 33.7 percent and Bostock's to 39.6 percent, Yahoo said.

Update 2:09 p.m. PDT: Quantitatively, the change means nothing: "These errors did not affect the outcome of the election of directors," Yahoo said.

But qualitatively, it's a different story, because withhold votes do send a message even if the board was still re-elected. The disapproval has dropped down to the range of last year's meeting, a few days after which former Chief Executive Terry Semel lost his job.

A transmission error by Broadridge Financial Services affected the withhold tally, lopping off any withhold votes beyond 100 million in some particular circumstances. Broadridge transmitted to Yahoo results from Capital Research Global Investors, which owns 6.2 percent of Yahoo stock at last count, and its sister group Capital World Investors, which owns 9.85 percent of Yahoo shares.


Update 2:23 p.m.: It's not hard to figure out why shareholders might be upset with the company, which is in the midst of a turnaround effort that began in 2007 and will last through 2008.

Since February, Yahoo's share price rose from $19.18 to the $30 range when Microsoft attempted to acquire first Yahoo then later just its search assets.

With those deals dead, for now at least, Yahoo's shares have sunk back down. The company's stock closed at $19.82 on Tuesday and dropped a few cents in after-hours trading.

Arthur Kern, Ronald Burkle, and Gary Wilson also saw a big jump in the percentage of votes withheld. Here's how the withhold-vote percentages changed for the various board members from Friday's tally to the Tuesday's revised results:

• Roy J. Bostock, 39.6 percent, up from 20.5 percent

• Ronald Burkle, 37.9 percent, up from 18.8 percent

• Eric Hippeau, 9.3 percent, no change

• Vyomesh Joshi, 7.1 percent, no change

• Arthur Kern, 31.7 percent, up from 22.1 percent

• Robert Kotick, 7.6 percent, no change

• Mary Agnes Wilderotter, 7.8 percent, no change

• Gary L. Wilson, 27.7 percent, up from 18.2 percent

• Jerry Yang, 33.7 percent, up from 14.6 percent.