Yahoo Inc shareholders protested a compensation package of more than 230 million dollars for Chairman and Chief Executive Terry Semel, withholding up to 18 percent of votes for three compensation committee members at the company's annual meeting on Thursday (May 19). The six other director candidates, including Semel, received at least 96 percent support in the vote by shareholders of the Web and Media Company. All nine candidates were elected. While the rate of withholding for the compensation committee members was higher than average, it was lower than a year ago, when shareholders withheld at least 25 percent of votes for committee members Robert Kotick, Gary Wilson and Arthur Kern, said Greg Taxin, chief executive of the proxy advisory firm Glass, Lewis and Co.
Taxin agreed that Semel's compensation was high, ranking highest among the CEOs at the 500 largest US companies last year, according to a recent Forbes magazine survey, but he said shareholders were less apt to complain when share prices were also on the rise. "The number is certainly big, but the (stock) performance has been excellent in a tricky market," Taxin added.
Shareholder Anthony Mezzapelle objected to Semel's 2004 compensation during this year's meeting. "I looked at your real peers and none of them came close," he said during the question-answer period.
Compensation committee chair Kotick responded that Yahoo's market value had risen by 40 billion dollars over the four years of Semel's tenure. Most of Semel's compensation last year was from stock options, which Kotick said were key to the company's ability to attract and retain executives. Shares in Yahoo closed at 36.75 dollars on Thursday, up 3.4 times from four years ago on a split-adjusted basis. "It's kind of hard to be upset about that," Taxin said.
Kotick, who is currently the co-chairman and chief executive of Activision Inc, was rejected by 16.7 percent of votes cast. Shareholders can vote for a candidate or withhold votes in a gesture of opposition.
According to the preliminary tally, shareholders withheld 16.8 percent of votes for Wilson and 18.4 percent for Kern. The other six board candidates included Semel, Yahoo co-founder Jerry Yang, Roy Bostock, Ronald Burkle, Eric Hippeau and Edward Kozel.
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