Investor questions Yahoo shareholder vote

Capital Research Global Investors, one of the larger and more vocal of Yahoo's shareholders has called for an independent probe into the shareholder vote that took place at last week's company meeting.

The company is questioning the strong showing in the vote for chief executive Jerry Yang, who has been under pressure for months over Microsoft's failed takeover bid.

Despite mounting questions about his leadership of Yahoo, last Friday's shareholder vote suggested the tide was turning in Yang's favour.

News of questions over the vote was first reported by the web site D: All Things Digital. It cited unnamed sources saying two major Capital Research and Management funds holding about 16 per cent of Yahoo shares had recommended withholding their votes in favour of Yang in protest over his performance.

Capital Research Global Investors, the fund group led by portfolio manager Gordon Crawford, was more strongly opposed to Yang than its sister fund, Capital World Investors, which was less critical, according to sources quoted by AllThingsD.

Yang received 85.4 per cent support in the vote, with the remaining votes withheld in protest.

"I guess Jerry Yang didn't come out of the meeting as unscathed as it seemed," Canaccord Adams analyst Colin Gillis said of the uncertainty raised by calls for a recount.

Investors holding nearly 76 per cent of Yahoo's 1.38 billion shares gave solid support for all nine board directors, with the lowest level of support for long-time member Arthur Kern, who drew 77.9 per cent.

Analyst firm Sanford C Bernstein said informal polling his firm had done among major investors showed widespread dissatisfaction with Yahoo's handling of talks with Microsoft, which the broker expected to translate into a more substantial number of withheld votes for directors.

Yahoo said in a statement it was not party to any errors that may have been made in the voting process.

"The independent inspector of elections certified the results of the election and Yahoo accurately announced those results," the company said in a statement.

But Yahoo left open the possibility that some intermediary may have made a mistake.

"Yahoo did not participate in the execution of the votes and was not a party to any errors which may have been made either by a voting institution or a proxy processing intermediary acting on behalf of banks, brokers and institutions," it said.

Crawford, whose Capital Research Global Investors owned 6.2 per cent of Yahoo as of early June, said in May he was "extremely angry" at Yang over the breakdown of talks with Microsoft. Capital World Investors held 9.8 per cent of Yahoo shares, according to recent regulatory filings.

A Capital Group spokesman said the Crawford-run fund had inquired with Broadridge Financial Solutions, a financial services intermediary that handles proxy processing services for it.

"Capital Research Global Investors asked Broadridge Financial to double-check the votes it transmitted to Yahoo on its behalf," said Chuck Freadhoff, a spokesman for the Capital Group and its affiliates. The spokesman declined to comment on how Capital-affiliated funds had cast their votes.

Broadridge declined to comment.