Questions About Yahoo Shareholder Vote (UPDATED)

Voting Machine Bumper StickerI thought we all had finally hit Yahoo saturation, at least so far as the shareholder meeting and proxy vote went. But no, there is apparently more squabbling on the horizon, with questions raised about the accuracy of the vote counting. The proxy committees of two funds owned by one big institutional shareholder, Capital Research & Management, had suggested that votes be withheld from Jerry Yang and some other board members, including chairman Roy Bostock, all of whom have come under strong criticism about the company's performance. Together, these funds own 16.3 percent of Yahoo's stock.

And yet the proxy vote results gave Yang 85.4 percent of the vote and Bostock 79.5 percent. There's no guarantee that the funds would decide to vote the way their proxy committees suggested â€" presumably there are deals to be made â€" but this is also in light of the relatively poor showing that Bostock and some others had last year, making this vote look like a love fest.

That would mean, assuming a large part of Capital Research's votes to withhold were counted, that only a few other investors voted against Yahoo.This is highly unusual in a year when many shareholders have been deeply unhappy with its management.
Furthermore, the number of shares that were not voted at seem to increase, with only 75.8 percent of share votes actually cast, compared to about 87.3 percent last year and 92.4 percent in 2006. Rumor has it that Capital Research is approaching vote tabulator Broadridge Financial Solutions to see if the counting was accurate.

Update: Turns out that Broadridge Financial has admitted to a technical error that caused an overreporting of the voters in favor of Yahoo's current board. However, the company hasn't disclosed what the votes should actually have been, only that the results are no different, which will probably lead to some frustration on the part of shareholders, because now it is impossible to know how much, or how little, confidence investors have in Yang or Bostock.

Even More Update: The vote counts have come out, and this was far from a casual mistake. A third of the votes were withheld from Yang, leaving him with 66.3 percent in favor of him, rather than the initially reported 85 percent. Members of the compensation board fared as badly in terms of votes withheld: nearly 40 percent from Bostock, 38 percent from Burke, and 32 percent from Kern. This is the second year in a row that the comp committee members received such a rebuke, and it's hard to imagine that a public slap will be all they get next year should things not change. Also, as if Yahoo didn't have enough problems trying to get support for its management policies, having the scope of the displeasure misreported, even if by accident, is going to make things much tougher. Expect to hear the continued crack of silk as key people parachute out.

Voting machine bumper sticker image via Flickr user ShutterCat7, CC 2.0