The comment comes in a bitter proxy that hedge fund Third Point just sent Yahoo shareholders seeking their support for the four candidates it wants on the company board: the fund’s CEO Daniel Loeb, corporate restructuring expert Harry Wilson, media consultant Michael Wolf, and former NBCUniversal CEO Jeff Zucker. Although Yahoo hasn’t announced its board candidates, or the date of its annual meeting, Third Point wants shareholders to authorize it to vote on their behalf for its candidates. The reason: Yahoo’s too focused on technology “at the expense of advertising and media, which accounts for the vast majority of the Company’s revenues,” the proxy says. That “fails to recognize the tremendous growth opportunity in video, and directly results from a dearth of essential expertise in media and entertainment at the Board level.” The document discloses that Loeb, whose firm controls 5.8% of Yahoo’s voting shares, spoke to Chairman Roy Bostock on September 12, shortly after the company fired CEO Carol Bartz. Loeb said that he considered Bostock and Yahoo co-founder Jerry Yang to also be responsible for the company’s problems and that Third Point “intended to pursue whatever efforts were necessary to remove Mr. Bostock from the Board.” Not surprisingly, the conversation “ended abruptly when Mr. Bostock terminated the call.” Yang resigned from the board on January 17, and a few weeks later Bostock and three other directors said that they wouldn’t stand for re-election.
Although the company said that it would seriously consider Third Point’s candidates, the actual response has been “dismissive.” Only Loeb has received more than a single call from a member of the Nominating and Corporate Governance Committee; two of the calls to Third Point candidates lasted just a half hour. As a result, the document says, Third Point had “no choice but to directly approach its fellow shareholders and solicit proxies” — although it adds that Yahoo’s new CEO, Scott Thompson, can still “take decisive leadership action by inviting the Third Point Nominees onto the Board.” It adds that “in the spirit of continuity and compromise,” Loeb would agree to let the board member Gary Wilson serve as chairman “for a one-year transitional period.” The proxy notes that Third Point paid its board candidates $50,000 and agreed to indemnify them from any lawsuits or expenses resulting from the campaign effort. Last month the company attacked Loeb’s “potentially disruptive” campaign “just as the Company is moving forward under new leadership to aggressively increase the value of Yahoo! for the benefit of all of its shareholders.”
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