Corporate Governance

I will not be attending. The proxy fight is over and it will not do shareholders or Yahoo! any good to have the annual meeting turn into a media event for no purpose. Last week, I realized it was impossible to gain enough support from the large institutions to win a majority of the Yahoo! directorships. In today?s corporate governance system where large mutual funds control so much of the stock, it is extremely difficult to oust an entire board, no matter how strongly a large number of shareholders feel about the board?s previous actions. Realizing I could not gain control, I saw no point in spending the final two weeks in a debilitating fight, where little would be accomplished except to build animosity between both camps and the end result would be no better than the compromise that was reached. In fact, in winning a minority position on a board by a fight to the end, you always have to be concerned that you may be "boxed" out by the majority that remains on the board. Committees can be formed that you are excluded from and you are given information only on a need to know basis. An important part of my compromise with Yahoo is that the board in the settlement agreement has agreed "that any meaningful transaction, including the strategy in dealing with that transaction, will be fully discussed with the entire board before any final decision is made."  Additionally, if any committee is formed to negotiate a meaningful transaction, Carl Icahn will be a member of that committee.

A few days ago, I met with both Jerry Yang and Roy Bostock and I believe both gentlemen genuinely wish that we will be able to work together to enhance value.  While we still disagree on many points, I have great hope "this will be the beginning of a beautiful friendship." Minorities on boards can accomplish a great deal (see following articles on Blockbuster).  I look forward to working harmoniously with the new board of Yahoo!