Supportive Votes for Yahoo's Yang Gang Were Wrongly Counted

06 August 2008

NEW YORK: It looks like the Wicked Fairy was irked at not being invited to Yahoo's christening party, judged by the internet portal's continuing spate of ill-fortune.

Having survived a crisis of shareholder confidence over the Yahoo board's handling of Microsoft's takeover approaches, and an annual meeting predicted to be Armageddon for founder/ceo Jerry Yang and his co-directors, all appeared to be sweetness and light during and after the event. 

At which point the Bad Fairy hexed the party.

After the board's re-election by a seemingly massive majority, Capital Research Global Investors, which owns around 6% of Yahoo, challenged the accuracy of the vote which was conducted by specialist firm Broadridge Financial Solutions.

Capital Research's concerns, it transpires, were well founded.

Broadridge acknowledged its error which saw Jerry Yang's 85% (in favor of his re-election) reduced to 66%. Likewise chairman Roy Bostock's tally of 80% fell to 60%; and Yahoo director Ron Burkle's fan club diminished from 81% to 62%. 

Explains Broadridge svp of regulatory affairs Chuck Callan: "A printout … sent to the voting tabulator mistakenly cut-off the first digit of the number of shares the investor wanted to withhold for certain directors".

It was, he assured, an isolated incident triggered by a unique combination of factors.

Or what us ordinary folk call a 'snafu'. 

The Wall Street Journal summarized the debacle: "The disclosure didn't affect the outcome of Friday's shareholder election, in which all directors were re-elected." 

It added, however: "It weakens the endorsement Mr Yang and other directors involved in negotiations with Microsoft Corporation received during Yahoo's shareholder vote last Friday and could serve as possible ammunition for critics who continue to seek strategic changes at the internet company."

Data sourced from Wall Street Journal Online; additional content by WARC staff