Icahn pushes Yahoo to scrap severance plan
SAN FRANCISCO - Dissident investor Carl Icahn escalated his attacks on Yahoo Inc.'s board yesterday in a letter demanding that directors scrap an employee-severance plan that drove up the potential costs of a Microsoft Corp. takeover.
SAN FRANCISCO - Dissident investor Carl Icahn escalated his attacks on Yahoo Inc.'s board yesterday in a letter demanding that directors scrap an employee-severance plan that drove up the potential costs of a Microsoft Corp. takeover.
If Yahoo's board sticks to the plan, Icahn indicated he would follow through on his three-week-old threat to ask shareholders to fire the board at the company's Aug. 1 annual meeting.
That move also would target Yahoo chief executive officer Jerry Yang, who cofounded the Internet pioneer 14 years ago and pushed for the adoption of the severance program. The plan could trigger $464 million to $2.4 billion in employee payments if Microsoft pulled off a successful takeover at a price ranging from $31 to $35 a share.
Those estimates were drawn from internal Yahoo records unsealed Monday in a shareholder lawsuit alleging Yang and the company's board had improperly spurned Microsoft ever since the software-maker made its first overtures in August 2006.
Microsoft chief executive officer Steve Ballmer withdrew an oral offer to buy Yahoo for $47.5 billion, or $33 a share, a month ago after Yang asked for $37 a share - a price that the company's stock has not reached since early 2006.
At $2.4 billion, the severance plan would translate into slightly more than $1.50 per Yahoo share that theoretically could be tacked on to Ballmer's last offer.