Will Yahoo Shareholders Say Sayonara Semel?

Last Updated Aug 20, 2007 7:09 PM EDT

The Yahoo! cow (I have no idea what this is)Yahoo! shareholders are likely to do some serious director-grilling at tomorrow's shareholder meeting after a year of dismal performance, and one singularly disgruntled shareholder will lead the charge. Eric Jackson, the president of an eponymous consulting firm, wants the company to pursue his "Plan B," which entails the ouster of chief executive Terry Semel and six other board members. But history says nothing dramatic is likely to happen at tomorrow's meeting, and Kara Swisher of WSJ's All Things Digital says there are six reasons why a revolution is out of the question:
  • The board will not act.
  • Jerry Yang (and also co-founder David Filo) is simply not someone who would ever lead a boardroom coup.
  • There is no outside investor influential enoughâ€"at this pointâ€"to force Semel to leave.
  • Nothing will happen until it is completely clear that results are in for Yahoo's new Panama system for monetization, which Semel has pushed and is banking on.
  • There's no successor in place yet.
  • The way for Semel, 64, to leave will likely be on his own steam, once the focus is off his salary and Panama improves Yahoo's prospects.
Meanwhile, an Associated Press article by Michael Liedtke provides a note of cautionary optimism for those who'd like to say sayonara to Semel:
Although still difficult to do, removing Yahoo's directors has become a more realistic option for shareholders because of a new policy adopted this year. The rules now require each Yahoo director to be approved by a majority of the votes cast. Previously, Yahoo directors only needed a single supporting vote to prevail in uncontested elections, no matter how many shareholders may have been opposed.
No matter your opinion of Terry Semel and the board, it's undeniable that something ain't right with Yahoo! The company has underperformed the S&P index (4.29% for Yahoo! and 9.27% for the S&P) and has been completely eclipsed by Google ($160 billion market cap for Google and $37 billion for Yahoo!). No matter what happens tomorrow, it's bound to be interesting, if only for its moribundity.

(Image of Yahoo! Cow by Franco Folini, CC 2.0)