Yahoo shareholder meeting will be day of discontent

Yahoo will hold its annual shareholder meeting and the agenda includes some discontent, some Terry Semel bashing and various proposals urging the company to take a bigger stand on free speech.

The shareholder meeting, which will be webcast beginning at 10 a.m. PT, sounds downright entertaining. Shareholders are miffed because of Yahoo's lagging stock price relative to Google's.

Needless to say the first target is CEO Terry Semel and the $39.8 million in total compensation he brought home in 2006. Shareholder Eric Jackson, CEO of Jackson Leadership Systems, Inc., a leadership, strategy, and process consulting firm, seems to be the most vocal of the dissatisfied. He's been on CNBC, quoted everywhere and has a blog that appears to focus on Yahoo's problems. He even has a YouTube campaign.

Here are the key items to watch:

• Yahoo is nominating 10 directors for one-year terms until 2008. Institutional Shareholder Services is urging votes be withheld for three directors--Roy J. Bostock, Ronald Burkle and Arthur Kern--on Yahoo's compensation committee, which approved Semel's pay package. The votes are symbolic overall, but make a point.
• Semel will be grilled. Jackson will get his big day questioning Semel--maybe. Seems like there's enough discontent to at least kick Semel around a bit.
• The United Brotherhood of Carpenters Pension Fund, which owns 21,900 shares of Yahoo, is proposing that adopts a "pay-for-superior-performance" standard. Under this arrangement, executives would only be awarded an annual bonus when Yahoo's performance exceeds its peers' median or mean performance. Yahoo urged shareholders to vote down this proposal, adding that the proposal is to narrow and doesn't account for other considerations. In its proxy, Yahoo says: "The board also believes the Compensation Committee should have flexibility to set goals for Yahoo! executives that do not necessarily refer to the performance of peer companies and to recognize and reward extraordinary individual performance that may or may not immediately affect Yahoo’s ranking for a particular performance metric for a particular year relative to its peer companies, but is nevertheless important to long range growth."
• The City of New York, which owns millions of shares in various pension funds for New York teachers, cops and firefighters, is proposing that Yahoo take a stronger stand against Internet censorship in new markets. Specifically, New York's proposal says Yahoo should hold data that can identify individual users be held outside of countries with censorship policies. Yahoo also shouldn't engage in pro-active censorship and use all legal means to resist censors. Yahoo urges shareholders to vote down the proposal because it has standards in place to advance free speech and play ball abroad.

What's the result of all this discontent? Not much unless some board members really get bounced.