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The Yahoo Annual Meeting Circus Rolls Back Into Town Next Week: Send in the Clowns?

Kara Swisher — Thu, 18 Jun 2009 11:45:17 +0000

In exactly one week at 10 am PDT, Yahoo will hold its annual meeting in Silicon Valley, the first time when new CEO Carol Bartz will greet its shareholders in person.

She should prep carefully, as the event has been quite a drama over the last two years.

In 2007, former Yahoo CEO Terry Semel left the company just days after a fractious annual meeting and was replaced by co-founder Jerry Yang.

And last August, the meeting was held in the midst of even more trouble.

The walk-up to that gathering included a failed takeover attempt by Microsoft (MSFT), extensive Yahoo (YHOO) management turmoil and a high-profile proxy fight waged by billionaire investor Carl Icahn.

And the meeting itself was also a mess, after shareholder voting was miscounted and it turned out that discontent about leadership was double what Yahoo first reported it was.

Broadridge Financial Solutions’ corrected tabulation of the vote on Aug. 1, without the “truncation errors,” showed Yang’s disapproval more than double what was previously reported, rising from 14.6 percent votes withheld to 33.7 percent. Yahoo Chairman Roy Bostock saw his shares withheld rise from 20.5 percent to 39.6 percent.

Yang later stepped down, as did President Sue Decker, both of whom presided over the meeting. Yang was replaced by Bartz early this year.

But most of the Yahoo board remains in place, with the addition of Icahn, including Bostock.

And today, just as it was then, Yahoo and Microsoft remain engaged in an ongoing push-me-pull-you relationship about whether to partner in search and online advertising or not.

Talks have been on-again-off-again for months now, including a meeting between Bartz and Microsoft CEO Steve Ballmer at the D: All Things Digital conference in late May.

Those talks have now appeared to reach yet another impasse, but that could change again quickly.

Sources at Microsoft said the software giant has remained interested in such a deal, although not at any price, a stance that has recently been made firmer by the apparent early success of its rehaul of its search offering, now called Bing.

Some inside the company think this puts added pressure on Yahoo to do a deal, before Microsoft actually logs in consistent gains in search share.

Microsoft has long been mired in third place at around eight percent, behind Yahoo by a dozen points and well behind Google (GOOG), which consistently tracks above 60 and 70 percent.

“Bing’s success only increases the odds [of a Yahoo deal] and decreases the price,” said one observer.

But a big price is exactly what Yahoo wants, with Bartz stating in an onstage interview with me at D7 that she was willing to do a deal for “boatloads of money,” as well as the right technology and data.

(You can see a video of Bartz’s full session here, talking about that and more.)

And she is backed, at this point, by the board, except for Icahn, who has been aggressively agitating for a Microsoft deal, in hopes it will return his huge investment in Yahoo into the black.

“He has been kind of driving Carol crazy about it,” said one source close to the situation.

For her part, Bartz has told many at the company and outside it that she was hired to make such key decisions and if the board–especially Icahn–did not like it they could find another CEO.

Yahoo has been upgraded recently by some analysts, based on confidence in Bartz’s ability to turn around and reinvigorate the company. The stock has seen a small bump up too.

But Bartz, although successfully projecting command of Yahoo and stabilizing the management over the last six months, has yet to put forth a detailed strategy for the company to stanch declines in profits and revenues and increase innovation.

And, although annual meetings are usually painfully scripted affairs, the event might be her chance to perhaps articulate that plan and more.

BoomTown will, of course, be front and center at the ongoing show to see what happens next.

Until then, here are two videos I did at the 2007 and 2008 annual meetings.

And below it, the great Barbra Streisand in a video, singing the classic, “Send in the Clowns”–which is pretty much the perfect theme song for the star-crossed Microsoft and Yahoo relationship.

2007:

[ See post to watch video ]

2008:

[ See post to watch video ]

Yahoo Board Support Suffers "Truncation Error"

John Paczkowski — Wed, 06 Aug 2008 18:00:24 +0000

[ See post to watch video ]

Yahoo Board Support Suffers "Truncation Error"

John Paczkowski — Wed, 06 Aug 2008 18:00:24 +0000

[ See post to watch video ]

New Yahoo Shareholder Vote: Yang Disapproval More Than Doubles

Kara Swisher — Tue, 05 Aug 2008 21:06:24 +0000

The vote is now in and it’s not so pretty for Yahoo, as it turns out.

Broadridge Financial Solutions’ corrected tabulation of the vote at the Yahoo annual meeting on Aug. 1, without the “truncation errors,” came out and, it seems, shareholders are actually mighty irked at Yahoo leadership.

Most glaringly, the new result shows Yahoo CEO Jerry Yang’s disapproval more than double what was previously reported, rising from 14.6 percent votes withheld to 33.7 percent. Yahoo Chairman Roy Bostock saw his shares withheld rise from 20.5 percent to 39.6 percent.

Yang (pictured here), who has been under fire for his management of Yahoo (YHOO), is likely to now endure yet another round of questioning about whether he should stay in his job in the wake of this massive show of disapproval by investors.

Here is part of Yahoo’s press release, with the correct and incorrect tables below:

Yahoo! Acknowledges Tabulation Error by Broadridge

SUNNYVALE, Calif., August 5, 2008 – Yahoo! Inc. (Nasdaq: YHOO) was informed today by Corporate Election Services, the inspector of elections for the Yahoo! annual meeting of shareholders on August 1, 2008, that Corporate Election Services was notified this morning by Broadridge Financial Solutions, Inc., an independent voting intermediary that processes proxies on behalf of banks, brokers and institutions, of errors made by Broadridge in reporting votes at the meeting. Specifically, as Broadridge publicly disclosed earlier today, when Broadridge reported voting results for “withholds,” a truncation error occurred in reporting share numbers that exceeded eight digits.

The following table reflects the corrected Broadridge numbers:

Roy Bostock (Shares For: 632,023,657/60.4%; Shares withheld 414,071,927/39.6%)

Ronald W. Burkle (649,373,291/62.1%; 396,722,293/37.9%)

Eric Hippeau (948,862,579/90.7%; 97,233,005/9.3%)

Vyomesh Joshi (971,594,650/92.9%; 74,500,934/7.1%)

Arthur H. Kern (714,871,925/68.3%; 331,223,659/31.7%)

Robert A. Kotick (967,044,818/92.4%; 79,050,766/7.6%)

Mary Agnes Wilderotter 964,939,727/92.2%: 81,155,857/7.8%)

Gary L. Wilson (756,006,576/72.3%; 290,089,008/27.7%)

Jerry Yang (693,055,602/66.3%;353,039,982/33.7%)

The following table shows the original voting results certified by the inspector of elections, as previously reported:

Roy J. Bostock (Shares for: 832,023,657/79.5%; Shares Withheld: 214,071,927/20.5%)

Ronald W. Burkle (849,373,291/81.2%; 196,722,293/18.8%)

Eric Hippeau (948,862,579/90.7%; 97,233,005/9.3%)

Vyomesh Joshi (971,594,650/92.9%; 74,500,934/7.1%)

Arthur H. Kern (814,871,925/77.9%; 231,223,659 /22.1%)

Robert A. Kotick (967,044,818; 92.4%; 79,050,766/7.6%)

Mary Agnes Wilderotter (964,939,727/92.2%; 81,155,857/7.8%)

Gary L. Wilson (856,006,576/81.8%; 190,089,008/18.2%)

Jerry Yang (893,055,602/85.4%; 153,039,982/14.6%)

Broadridge to Yahoo: Oops, We Added Wrong (and Shareholders Like You Lots Less)!

Kara Swisher — Tue, 05 Aug 2008 17:07:09 +0000

Here’s the full statement (below) from the outside firm, Broadridge Financial Solutions, that tabulated Yahoo’s recent shareholder vote.

Bottom line: An underreporting of shares withheld for certain directors, which the Lake Success, N.Y., shareholder services firm is calling an “isolated incident” and also a “truncation error.”

That sounds painful.

And it is likely Yahoo CEO Jerry Yang will feel much of that pain, as sources said the shares are largely those that were withheld from him by disgruntled shareholders.

While the mistake will not change the vote’s overall outcome, in which all current Yahoo (YHOO) directors were re-elected, it will surely make the no-vote tally worse than first reported for many directors, and underline more clearly the increased investor disappointment directed at Yahoo leadership.

As reported Friday, for example, Yang only had 14.6 percent withheld, with 85.4 percent voting for him, which was better than the year before.

A Yahoo spokesman said the company was redoing its results, based on the new information, and would release the new numbers soon. The Internet company did not do the vote tabulation.

The examination of the results was prompted by an unusually positive Yahoo shareholder vote, when it did not seem to include the withheld votes of one major Yahoo shareholder.

Thus, Capital Research & Management asked Broadridge for a recount of its votes.

The problem centered on how shares were tallied in the Yahoo annual meeting, specifically related to a group of votes withheld by Capital Research Global Investors.

That fund owns almost seven percent of Yahoo, and its head, Gordon Crawford, had recommended withholding votes from Yahoo.

Here is the statement from Chuck Callan, Senior Vice President Regulatory Affairs at Broadridge:

On August 4, Broadridge was notified by an investor of a potential discrepancy in a reported vote at the Yahoo Annual Meeting on August 1.

Upon review, it was determined that there was a truncation error in the final printout sent to the tabulator. This resulted in the underreporting of shares withheld for certain directors.

This error did not change the outcome of the election of directors, and was determined to be an isolated incident.

Broadridge has determined that the situation was unique–a truncation error occurred when shares withheld for a specific director in a specific nominee exceeded 8 digits and were reported to the tabulator in paper format. Broadridge has fixed the problem. Further, Broadridge has verified that over the past 18 months there were no other meetings with reports that included this unique combination of factors. The review is ongoing for meetings occurring before then.

On August 4th Broadridge notified Yahoo’s Inspector of Elections and Tabulator of the problem, and a revised report was issued on August 5th.