Vote glitch overstated support for Yahoo's Yang

SAN FRANCISCO - Yahoo!'s chief executive Jerry Yang and four other directors were re-elected to the internet firm's board with much higher protest votes than first thought due to a technical glitch at an independent vote-processing firm.

The glitch did not change the outcome of the last week's election. However, it did expose a far stronger level of shareholder dissatisfaction with the company's performance and its failed merger negotiations with Microsoft.

Votes from Los Angeles-based Capital Group, which is one of Yahoo!'s biggest shareholders with 16%, were miscounted after an agent acting on the group's behalf, made a "truncation error".

The agent, Broadridge Financial Solutions, said the error led it to underreport the number of votes withheld from several directors.

Yahoo released revised figures which show that 33.7% of shareholders voted against the re-election of Yang - much more than the 14.6% figure first published. It makes Yang's position appear much less secure.

Roy Bostock, Yahoo!'s chairman, received a 39.6% "no" vote, as opposed to the original 20.5% vote that was reported.

Three other directors also had more votes withheld than previously thought. Ronald Burkle received a 37.9% "no" vote (previously 18.8%), Arthur Kern 31.7% (previously 22.1%) and Gary Wilson 27.7% (previously 18.2%).

Yahoo! stressed that it had carried out its own vote tally properly and said the error was caused by Broadridge.

Broadridge re-examined the vote after major shareholder Capital Group asked for checks to be made on Monday. It had voted all its holding against the board, but the results did not seem to reflect this.

The original result for Yang and his fellow directors had surprised some industry watchers who thought that questions over his leadership of Yahoo! during Microsoft's abortive bid would lead to more dissent.

Yahoo! shares gained 44 cents to close Tuesday at $19.82 per share.