Icahn to Yahoo’s board: Shame on you

June 11, 2008

icahn2.jpg The heat is definitely on at Yahoo.

As though it weren’t under enough pressure, the board now has Carl Icahn warning them that they will be held personally liable for approving a controversial employee severance plan.

Oh, and shareholders suing the company now want a speedy trial related to failed merger talks between Yahoo and Microsoft, saying they would like to get to court before the company’s August 1 annual meeting.

Here’s the upshot of the fight over the severance plan: Shareholders suing the company argue that the board is free  to reorganize Yahoo’s work force as it sees fit without fear of triggering the severance benefits.

But the catch, they say, is that if Icahn’s board slate prevails, then Yahoo shareholders will be forced to fund the costly severance payouts to departing workers.

Yahoo denied assertions made in the lawsuit in a response filed with U.S. regulators.

Let’s forget the courts for a second. Perhaps of more immediate concern is the public relations battle that Icahn is waging against Yahoo. Yesterday, after a speech to the New York Financial Writers’ Association, Icahn told Reuters, “If they continue with this line, I believe they (the board) may be personally liable.” 

He also called the board’s actions “reprehensible.”

“These board members get $10,000 a week to go to a few boondoggle meetings,” he said during the speech.

You can imagine that Yahoo’s boardroom isn’t the place you really want to be spending your summer.

Keep an eye on: 

  • The new iPhone wasn’t the only Apple blockbuster franchise displaying a slimmer frame Monday – a dramatically skinnier CEO Steve Jobs was, too (NY Post)
  • Pearl Jam has struck a deal with Verizon Wireless’ V Cast service to sell select tracks from the authorized live bootlegs that will be available in conjunction with the band’s upcoming summer tour (Billboard)
  • U.S. officials are facing a potential glitch in a program designed to help television viewers make the switch to digital TV next year (Reuters)
  • Landmark Communications has distributed information to potential bidders on Dominion Enterprises, its portfolio of advertising websites and publications, now that its attempt to sell The Weather Channel is nearing its final stages (FT.com)
  • FiLife, a personal finance venture from IAC/InterActiveCorp and Dow Jones & Co, will open its site to a public test on Wednesday after a year in development and much media speculation over its future (Reuters)

(Photo: Reuters)

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