Yahoo shareholders still angry about Microsoft deal

By Yi-Wyn Yen

SAN JOSE, Calif. –Carl Icahn made the right choice not to fly out west to attend the Yahoo shareholder meeting Friday.

The billionaire activist who is the newest Yahoo director wasn’t the only one that didn’t show up to the  gathering. Judging by the number of shareholders who did attend, interest in the annual meeting was fairly low. But there were still some fireworks from shareholders who remain disgruntled over how Yahoo’s board handled buyout negotiations with Microsoft.

Eric Jackson, a dissident shareholder from Florida, kicked off the question-and-answer session  by criticizing Yahoo chairman Roy Bostock. “I think you’re overpaid for compensation,” Jackson said. “I think you overplayed your hand with Microsoft and you’ve overstayed your welcome.”  The audience clapped and cheered and then laughed when Yang replied, “Eric… It’s good to see you again.”

Bostock defended his position on the board. He claimed that he made less than $500,000 in the past year and said there was a “mischaracterization and misperception” of how he handled the Microsoft deal. When another shareholder demanded that Bostock file a time sheet on the Internet, Bostock said that he would be happy to show that he worked “26 hours in a 24 hour days… in the last six months.”  He again stressed that the entire board was “deeply involved” with the Microsoft (MSFT) negotiations.

Over the course of two hours, the board’s eight members were re-elected and Yahoo’s management team – CEO Jerry Yang, president Sue Decker and CFO Blake Jorgensen – reiterated their strategy to boost the company’s top and bottom lines by turning Yahoo into a starting place and a “must-buy” for advertisers.

It was clear that Yahoo (YHOO) had expected more attendees. Only a quarter of the roughly 700 chairs available were filled in the darkened ballroom that Yahoo rented at the Fairmont Hotel in downtown San Jose. Mountains of pastries were left untouched in the hallways of the hotel. Rooms set up to deal with an overflow capacity went unused.

“We planned for this before the proxy fight came to an end,” said Yahoo spokesman Adam Grossberg.

Icahn gave up his proxy fight last week in exchange for three seats on Yahoo’s board. Along with the corporate activist, the two Icahn appointees on the newly expanded 11-member board, will be announced within two weeks.

In a blog post Thursday, Icahn wrote that he wasn’t coming to the shareholder meeting because he didn’t want to turn it into a “media event for no purpose.”  Bostock said he was looking forward to working with Icahn, and using air quotes, referred to Icahn as a “good guy despite what some say about him.”