By Anupreeta Das and Eric Auchard
7 minutes ago
Yang has been under pressure for months over failed
negotiations to sell the company to Microsoft Corp and
regarding questions about his leadership, but Friday's
shareholder vote suggested the tide was turning in his favor.
News of questions over the vote was first reported by the
D: All Things Digital blog. AllThingsD cited unnamed sources
saying two major Capital Research and Management funds holding
about 16 percent of Yahoo shares had recommended withholding
their votes in favor of Yang in protest over his performance.
Capital Research Global Investors, the fund group led by
portfolio manager Gordon Crawford, was more strongly opposed to
Yang than its sister fund, Capital World Investors, which was
less critical, according to sources quoted by AllThingsD.
Yang received 85.4 percent support in the results announced
on Friday, with the remaining votes withheld in protest.
"I guess Jerry Yang didn't come out of the meeting as
unscathed as it seemed," Canaccord Adams analyst Colin Gillis
said of the uncertainty raised by calls for a recount.
Investors holding nearly 76 percent of Yahoo's 1.38 billion
shares gave solid support for all nine board directors, with
the lowest level of support for long-time board member Arthur
Kern, who drew 77.9 percent.
Sanford C. Bernstein analyst Jeffrey Lindsay said informal
polling his firm had done among major investors showed
widespread dissatisfaction with Yahoo's handling of talks with
Microsoft, which the broker expected to translate into a more
substantial number of withheld votes for directors.
"We were surprised at the very high vote counts that were
pro Jerry Yang," Lindsay said. "Certainly the final results
seemed very different from the exit polls."
Yahoo said in a statement it was not party to any errors
that may have been made in the voting process.
"The independent inspector of elections certified the
results of the election and Yahoo accurately announced those
results," the company said in an e-mailed statement.
But Yahoo left open the possibility that some intermediary
may have made a mistake.
"Yahoo did not participate in the execution of the votes
and was not a party to any errors which may have been made
either by a voting institution or a proxy processing
intermediary acting on behalf of banks, brokers and
institutions," it said.
Crawford, whose Capital Research Global Investors owned 6.2
percent of Yahoo as of early June, said in May he was
"extremely angry" at Yang over the breakdown of talks with
Microsoft. Capital World Investors held 9.8 percent of Yahoo
shares, according to recent regulatory filings.
A Capital Group spokesman said the Crawford-run fund had
inquired with Broadridge Financial Solutions Inc, a financial
services intermediary that handles proxy processing services
for it.
"Capital Research Global Investors asked Broadridge
Financial to double-check the votes it transmitted to Yahoo on
its behalf," said Chuck Freadhoff, a spokesman for the Capital
Group and its affiliates. The spokesman declined to comment on
how Capital-affiliated funds had cast their votes.
Broadridge declined to comment.
(Additional reporting by Muralikumar Anantharaman in
Boston; Editing by Toni Reinhold and Braden Reddall)
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