Yahoo shareholder vote challenges board

Nearly a third of votes for at least one board member were cast against his election, an unusually high protest, even though all 10 candidates were elected. Proposals opposed by the board that aimed to tie executive pay to competitive performance and challenge the company's human rights policies in China were defeated.

Eric Jackson, who said he represented a group of current and former Yahoo employees that own 2.1 million shares, said presentations by senior company officials failed to give specifics on how Yahoo can jump-start growth.

"I am surprised that you didn't apologize for the last three years of performance," Jackson said during a question-and-answer session that followed the formal meeting, directing his comments at Yahoo Chairman and Chief Executive Terry Semel.

Yahoo's share price is flat versus three years ago.

Amid economic weakness in some advertising markets and delays in upgrading its Web search ad system to better compete with rival Google Inc., Yahoo shares last year tumbled roughly 38 percent. After a false start this year, they are trading back at $27.05, up just 6 percent from the end of 2006.

Yahoo did not disclose the actual votes for specific board members. But a company spokeswoman said that the lowest vote in favor of reelecting a board member was 66.6 percent, with 32.6 percent against, with abstainers accounting for the balance.

Yahoo management reiterated that it expects to see a pick-up in its business in the second half of the year as its recently upgraded Web search advertising system, known as Panama, kicks into high gear in competition with Google.

"You are seeing real progress," Semel told a few dozen shareholders attending the annual meeting, held in a Silicon Valley convention center just down the road from the company's Sunnyvale headquarters.

In February, Jackson published a "Plan B" for Yahoo on the Web at http://breakoutperformance.blogspot.com/2007_02_01_archive.html. He called for Semel and Yahoo's board to be fired and for strategic changes to be made to compete with Web leader Google Inc.