Monday, July 21, 2008

Activist Investor Eric Jackson Recommends Mixed Yahoo!/Icahn Board in Upcoming Yahoo! Proxy Vote

TORONTO/NAPLES, July 21, 2008 – Activist investor Eric Jackson, founder of activist hedge fund Ironfire Capital, announced his recommendation that Yahoo! shareholders supporting his “Yahoo Plan B” group elect a mixed Yahoo/Icahn board at the upcoming Yahoo! Annual Meeting on August 1st.

Dr. Jackson is speaking on behalf of the "Yahoo Plan B" group, comprised of 150 members that own 3.2 million shares in Yahoo! worth over $70 million ( ). The “Plan B” group is the first group of shareholders assembled entirely via the Internet with the purpose of positively impacting a company’s governance and performance in a similar fashion to a large activist hedge fund.

Last year, Jackson used blog posts, YouTube videos, and other social media to rally support and positively effect change at Yahoo! His group created a “Plan B” for how Yahoo! should be run after finalizing it through a wiki ( ). The group also encouraged other shareholders to “withhold” their votes for key directors at the Yahoo! June 2007 Annual Meeting to protest the poor performance of the company combined with high executive compensation. At last year’s annual meeting, Yahoo! shareholders voted 33% against the re-election of 3 Yahoo! directors. Six days after the vote, former Chairman and CEO Terry Semel resigned.

Jackson will be announcing more details of his recommendations for how the “Yahoo! Plan B” group members should vote at this year’s Yahoo! meeting later today with the launch of a Yahoo! shareholder community at . Fellow shareholders can express their perspectives on how best to vote in the upcoming proxy contest at this HUB.

"While I have personally supported Carl Icahn's efforts since he announced he was running his slate to counter the Yahoo! board's poor oversight of the company over the last 4 years, it’s become clear over the last two weeks that many shareholders are reluctant to support the entire list of Icahn nominees. Many were concerned about a lack of an articulated operational plan for how to best run Yahoo! assuming no deal with Microsoft occurs imminently. There were also concerns about continuity with replacing the entire board. We also do not want to see Yahoo!’s poison pill-like severance package triggered by the election of 5 or more of Icahn’s nominees. As such, we are recommending that our group members vote for a mixed board with 5 re-elected Yahoo directors and 4 new directors from Icahn's slate. This will maximize the change so desperately needed to Yahoo!’s board without the drawbacks mentioned above.

“We believe Microsoft needs Yahoo! to reinvigorate its Online Services Division and protect its Desktop software business from future threats, as their quarterly results from last week demonstrate. There is a perfect fit here for Microsoft. We are confident this new hybrid Yahoo! board can effectively conclude a deal with them as representatives of the shareholders.

“This recommendation should in no way be interpreted as satisfaction with the current Yahoo! board. Yahoo! has been in decline for 4 years now, while this board has sat back and watched – only showing great involvement when taking time to approve extravagant pay packages or furiously writing tit-for-tat letters in the past 2 months. They sat back for 5 weeks and did not engage with Microsoft after the February 1st buyout offer at a 62% premium; a move that seems very unwise in retrospect.


Dr. Jackson is recommending the re-election of the following current Yahoo board members:

- Vyomesh Joshi

- Robert Kotick

- Maggie Wilderotter

- Gary Wilson

- Jerry Yang

Jackson is recommending that members mark their Yahoo proxies with an "X" next to the option "Withhold authority to vote for any individual nominee(s) below" and then write in the numbers: 1, 2, 3, and 5. Those numbers correspond with voting against Messrs. Roy Bostock, Ronald Burke, Eric Hippeau, and Arthur Kern.“We hold these 4 directors most responsible for the breakdown in talks with Microsoft and past lavish executive compensation” stated Jackson. “It’s time for some new blood.”


Dr. Jackson is recommending the election of the following Icahn nominees:

- Adam Dell

- John Chapple

- Lucian Bebchuk

- Edward Meyer

Dr. Jackson concluded by stating “Yahoo's board has skilfully turned this proxy contest into a debate about Carl Icahn's ability to run the company, which we believe is a smoke-screen to distract shareholder attention from their abysmal track record overseeing this company. A leopard doesn't change his spots. Therefore, we feel strongly that new perspectives need to be introduced to this board to ensure future accountability to Yahoo! shareholders. We urge our "Yahoo Plan B" supporters to vote for this mixed board to accomplish that goal.”

About Eric Jackson

Eric Jackson is founder and Managing Member of Ironfire Capital LLC, an activist investment firm in Naples, FL. He received a Ph.D. in the Management Department at Columbia University Graduate School of Business in New York, with a specialization in Strategic Management.

About Ironfire Capital LLC

Ironfire Capital LLC ( ) is an equity long biased and event-driven activist investment firm. Ironfire was founded by Eric Jackson in 2007 after successful activist campaigns targeting Yahoo! and Motorola. Ironfire combines the power of activist investing, with proprietary analytics and utilizes Internet-based social networking tools to gather information and amplify the impact of current focus campaigns.


Eric Jackson, Ph.D.
Managing Member
Ironfire Capital LLC
jackson at

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