Yahoo's investors came away from the company's annual shareholders meeting yesterday with three key takeaways--a gauge on CEO Terry Semel's accountability, some clarity on Yahoo's stance on data
censorship and human rights, and plans for filling departed CTO Farzad Nazem's leadership role.
Shareholders questioned Semel's dedication to his position, both formally and
informally. One of the most vocal investors in recent weeks has been Eric Jackson, CEO of Jackson Leadership Systems, Inc., who asked Semel to "acknowledge that the last few years have been
unacceptable" with a direct apology. In response, Semel defended the company's efforts to fulfill its mission statement, and alluded to delivering positive, hard numbers during the Q3 and Q4 earnings
meetings.
Another shareholder asked outright whether Semel still has "a fire in his belly for the job." Although the two bantered back and forth, Semel ultimately affirmed his passion for Yahoo
and confidence in the company.
"I feel very good about my capabilities," said Semel. "I believe in our model. I believe in being diversified." He mentioned partnerships with Apple to deliver
mobile Web service to the iPhone, as well as the success of Flickr, Answers and Yahoo's recent newspaper advertising deal as examples of the company's progress.
An earlier jab at Semel's
accountability came in the form of a stockholder-initiated proposal for Yahoo to adopt a "pay for superior performance" standard. The United Brotherhood of Carpenters Pension Fund, which owns 21,900
Yahoo shares, proposed a system that would only allow executives to be awarded an annual bonus "when Yahoo's performance exceeds its peers' median or mean performance." Although it was met with
resounding applause from attendees, some 62% of shareholders later voted against the incentive-based program.
Two separate shareholder-initiated proposals raised the issue of Yahoo's policies
toward censorship and human rights in developing markets. The City of New York, which owns millions of shares in various pension funds for teachers, cops and firefighters, proposed that Yahoo use all
legal means to resist censors, as well as withhold data that could identify individual users in countries with censorship policies.
A second proposal called for the formation of a committee on
human rights that would exist within the Board of Directors. The shareholders specifically brought attention to Yahoo's "betrayal" of Chinese journalist Shi Tao, who was sentenced to 10 years in
prison after the company supplied the Chinese government with information on his Internet use.
Although both proposals were defeated, with 71% and 81% against them respectively, co-founder Jerry
Yang reiterated the company's dedication to preserving the rights of Yahoo users in countries abroad. "This is an issue that will not go away for us," said Yang. "We remain fully committed to
protecting human rights both as the challenges and opportunities grow."
When stockholders asked if Yang and co-founder David Filo would make their interim CTO responsibilities (in Farzad Nazem's
absence) more permanent, Semel extended an open invitation to Yang, who sidestepped gracefully. Semel did say that Yahoo was actively looking for talent to fill the position, both from inside and
outside the company.