A THREE-RING CIRCUS

Three shareholder proposals opposed by the company will be put before shareholders for the second year running.

The first is a "pay for performance" plan and calls for executive compensation at Yahoo to be linked to how well the company performs versus Internet peers. Currently executive compensation is based largely on time served and not conditioned on performance, critics have complained. A similar proposal won 34.6 percent of shareholder votes last year.

Two other loosely related proposals ask the board to adopt an anti-censorship policy and to pay more attention to human rights in markets where it is active, specifically China.

Ahead of the Beijing Olympics, these votes may resurrect old wounds stemming from Yahoo's indirect role in turning over e-mails that Chinese authorities used to prosecute dissidents.

Wall Street analysts see only a small chance that a protest vote would reshape the existing board.

"Some of the bigger shareholders want to push for a new CEO," he said. "They won't do so at Friday's meeting."

Sanford C. Bernstein analyst Jeffrey Lindsay agreed a negative vote against Yang or other directors would put pressure on them to leave, although they are under no pressure to do so under Yahoo bylaws, corporate governance experts say.

"There is a small possibility that shareholder disappointment results in Jerry Yang being moved aside in a sort of bloodless coup," Lindsay said.

Former CEO Terry Semel stepped down one week after last year's meeting, where board members were chastised by shareholders over the company's slumping financial results, excess executive pay and human rights record.

"The clock is ticking on Jerry. Everybody knows that," said Canaccord Adams analyst Colin Gillis.

Investor advisory firms are split on whether to fully support the reelection of Yahoo's board, but their reviews have less weight since Icahn reached a deal that effectively guaranteed the reelection of the existing board.

Two firms, Glass Lewis & Co and Proxy Governance, have recommended that Yahoo shareholders vote against Bostock and two other directors in protest over the company's track record on executive pay.

Separately, ISS Governance Services recommended in its own report last week that investors vote to reelect all existing Yahoo board members. But ISS differed with Yahoo management on a nonbinding proposal to be put forward Friday, recommending to its base of institutional investors that they vote for the "pay for performance" plan that Yahoo management has opposed.

(Editing by Leslie Gevirtz)

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