Yahoo revises bylaws allowing proxy access
Yahoo Inc has revised its bylaws that allow proxy access. This gives long-time shareholders the power to place candidates on board over shareholder ballots. The revised bylaws are effective after the 2016 annual general meeting (AGM) scheduled in June or July.
The revision of bylaws at Yahoo Inc facilitates long-time shareholders power to place board candidates on ballots. As per the changes in bylaws at Yahoo Inc, a group of up to 20 shareholders with three percent stake for three years holding may nominate the greater of two directors or 20 percent of the total on the board.
The Wall Street Journal (WSJ) reports that Yahoo shareholders may vote on whether to replace all nine board members at the annual general meeting to be held in June or July this year. Activist investor Starboard Value LP has called for a change at the web pioneer. Starboard Value has also raised voice over repeatedly failure of Yahoo's management and board from shareholders' point of view.
Starboard has nominated its full slate for directors under Yahoo's existing bylaws. However, revised bylaws that allow proxy access will not affect it, according to Patrick McGurn, Special Counsel for proxy advisory firm Institutional Shareholder Services Inc.
Fortune further adds that proxy access enables shareholders to nominate directors to run against the company's chosen slate of director nominees. The nominated directors by long-term shareholders can use its annual meeting materials. Activist investor Starboard Value LP owns 1.7 percent in Yahoo. It unveiled a proxy fight recently to thrash nine-member board of company.
Yahoo is reeling under pressure to sell its core business. Shareholders of Yahoo are pressurizing the company to offload its core business. Yahoo in February commenced auctioning the business. It has already shelved its plan to spin off its stake in Alibaba, an e-Commerce giant from China.
Other global majors have also embraced proxy access. General Electric Co, AT&T Inc, Apple Inc and Citigroup Inc have adopted it. This apart, 117 companies in the US in 2015 embraced proxy access. Starboard has mainly pressurized Yahoo management on accepting the aforementioned matter. Yahoo Chief Executive Marissa Mayer was in the process of making the company turn around or sell it.
Section 2.7 under Proxy Access for Director Nominations will begin after AGM-2016. The director to be nominated by long-term shareholders has to furnish a written questionnaire. Shareholders-proposed directors should provide details about their background, qualifications, stock ownership and independence of nominee. The details should also include representations such as certain voting commitments or third party compensation arrangements, as reported by StreetInsider.
Advisors for Yahoo negotiated with potential buyers such as Verizon Communications Inc, IAC/InterActiveCorp and Time Inc. Private equity (PE) firms such as TPG and KKR& Co also participated in the discussions with the advisors.