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Yahoo! The Internet Businesses

Judge OKs Settlement In Yahoo Shareholder Suit 40

Posted by ScuttleMonkey
from the play-nice dept.
narramissic writes "On Friday, Judge William Chandler III of the Delaware Court of Chancery approved a settlement that will roll back a Yahoo employee severance that was implemented by Yahoo's former leaders. Some investors, including the vocal Carl Icahn, described the plan as a poison pill, arguing that the severance payouts would be so expensive that no company would want to acquire Yahoo. The settlement narrows the reasons why employees can quit and receive the severance, removing some of the incentives for them to leave the company in the event of a Yahoo acquisition, whether by Microsoft or some other suitor."
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Judge OKs Settlement In Yahoo Shareholder Suit

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  • by MightyMartian (840721) on Monday March 09, 2009 @05:51PM (#27127317) Journal

    And in other news, Yahoo slips further into irrelevance.

    • by Samschnooks (1415697) on Monday March 09, 2009 @05:56PM (#27127379)

      And in other news, Yahoo slips further into irrelevance.

      Yeah, I haven't seen anyone drinking that. At least where I live, people prefer to drink Coke.

      • by davidsyes (765062)

        Instead of poison pills, companies wanting more regularized control of their "acquisition" should create "laxatives".

        Then, instead of slipping into irrelevance, they can slip more regulated. They could try Prune Juice (Or, in poolitically correct California, "dried plums", hehehehe).

        Butt, in any case, an exturnal endsqishsition boosted by a sooper assisted asscquisition would be a massy undertaking... umm... proposition...

        Butt, thin a again, newly set up companies should set up high merger-buyout pills in t

  • by Samschnooks (1415697) on Monday March 09, 2009 @05:52PM (#27127325)

    "We are very pleased that the settlement was approved because we believe it is in the best interests of the company and our shareholders," the company said in a statement.

    I think it really means:

    "We are very pleased that the settlement was approved because we believe it is in the best interests of the executives and maybe our shareholders," the company said in a statement.

    Yeah, I'm a cynical old bastard, but can you blame after what's happened in the last six months?

    • by Trojan35 (910785)

      Maybe? It's definitely in the best interest of the shareholders. Unless you think all of Yahoo's top talent will now leave for the millions of lucrative tech jobs around the bay. Wait a minute...

    • by mehtars (655511)
      Actually, with the current conditions of the market, the best case would have been to sell to microsoft . This makes any sale easier.
      • by hairyfeet (841228)

        Sure, if you want the company destroyed. If that is the case why not just burn the buildings for the insurance? Seriously MSFT Search sucks. Hotmail before MSFT touched it was okay. After? Giant pile o' suck. I use Yahoo Search and love my Yahoo mail. If MSFT gets a hold of it I will turn my Yahoo accounts into spam dumps and switch back to Google. Why? Because 6 months or less after MSFT gets their hands on it Yahoo will be rebranded as "Yahoo Web Live 2.0 With Extra Vista Goodeness!" And just like MSN Sea

  • I was thinking that these severance agreements were supposed to be a poison pill to discourage a corporate take over.

    Times they are a changin'.

  • by rbanffy (584143) on Monday March 09, 2009 @05:57PM (#27127395) Homepage Journal

    I must congratulate the P.R. team behind Icahn. The press keeps calling him "activist investor" when "corporate raider" would be a far more appropriate term...

    • Re: (Score:2, Insightful)

      by Samschnooks (1415697)

      I must congratulate the P.R. team behind Icahn. The press keeps calling him "activist investor" when "corporate raider" would be a far more appropriate term...

      It does sound better, but from a shareholder perspective, those raiders are a benefit. Unfortunately, corporate management very rarely works in the best interests of the stockholder and trying to get them fired is pretty much impossible without buying the company outright. Even the mutual fund that may have millions of shares in a particular company will have maybe a one percent of voting power. The stockholder almost always loses when management gets their way.

      • by Dhalka226 (559740) on Monday March 09, 2009 @06:42PM (#27127837)

        Unfortunately, corporate management very rarely works in the best interests of the stockholder and trying to get them fired is pretty much impossible without buying the company outright.

        All Icahn wants is to have the company sold. By that logic, whoever buys it would be just as likely to not work in the best interests of the stockholder and their only recourse will be to try to get the company sold. Over and over and over ad nauseum.

        Boon to stockholders? Probably. Then again I think we're living with the consequences of pretending money comes out of thin air to reward people for something that doesn't actually change anything. Things can appreciate, but not instantly, not merely on speculation, and not just because the stockholders would like some quick cash please.

      • by Mr. Underbridge (666784) on Monday March 09, 2009 @06:43PM (#27127845)

        It does sound better, but from a shareholder perspective, those raiders are a benefit. Unfortunately, corporate management very rarely works in the best interests of the stockholder and trying to get them fired is pretty much impossible without buying the company outright. Even the mutual fund that may have millions of shares in a particular company will have maybe a one percent of voting power. The stockholder almost always loses when management gets their way.

        That depends strongly on what time horizon you evaluate the shareholder perspective. Your average shareholder would like nothing more than for management to operate the company like a big pump-n-dump machine, jacking up the stock price for the next two quarters at the expense of long-term profitability. If management's doing its job correctly, it won't listen to the day-traders, instead building a solid company over a span of years.

        And if the shareholders don't like that, then they should invest in lottery tickets, not companies who actually make useful things.

        • by rachit (163465) on Monday March 09, 2009 @08:09PM (#27128633)

          That depends strongly on what time horizon you evaluate the shareholder perspective. Your average shareholder would like nothing more than for management to operate the company like a big pump-n-dump machine, jacking up the stock price for the next two quarters at the expense of long-term profitability. If management's doing its job correctly, it won't listen to the day-traders, instead building a solid company over a span of years.

          I never understood this argument. Fraud aside, you shouldn't be able to jack the stock price without increasing profitability long-term or the promise of liquidation at a higher price in the near term.

          Dumb investors that cause the temporary rise in price by short-sightedness should eventually go broke.

          • I never understood this argument. Fraud aside, you shouldn't be able to jack the stock price without increasing profitability long-term or the promise of liquidation at a higher price in the near term.

            I agree you shouldn't be able to, but you absolutely can. It's way too easy to put lipstick on quarterly reports to make them look better than they are. It's hard to tell if cost cutting is good, or something that will hurt the company long-term. Problem is, shareholders don't have the insight into a comp

          • What you say would be true if stocks were valued according to expected long-term return, but they aren't. They're primarily valued circularly: based on expected value in the next 3-12 months.

          • Fraud aside, you shouldn't be able to jack the stock price without increasing profitability long-term

            Of course you can, by increasing short term profits. Two ways to do that: cut R & D, cut quality.

            Dumb investors that cause the temporary rise in price by short-sightedness should eventually go broke.

            It doesn't work like that. They sell out and move on to another company, leaving the long term losses & the mess to someone else.

    • I must congratulate the P.R. team behind Icahn. The press keeps calling him "activist investor" when "corporate raider" would be a far more appropriate term...

      You spelled "douche bag" wrong.

    • There are some people (not to mention any names), including some iconic people, who need to be dumped into the wilderness wit nothing but a pair of briefs and a knife, to find out what it's really like when the wolves get ahold of the little guy.

  • MOTS (Score:5, Insightful)

    by sohp (22984) <<moc.oi> <ta> <notwens>> on Monday March 09, 2009 @06:51PM (#27127901) Homepage

    Again the execs with million-dollar buyout packages and short-term traders will scrape a few more crumbs into their fat mouths off the already nearly-empty plates of the ordinary folks who actually make the company go.

    s

  • by Keith_Beef (166050) on Tuesday March 10, 2009 @09:57AM (#27133891)

    If I've understood, and this is not necessarily the case, I admit, the judge has just decided that he is authorized to modify contracts in order to give financial benefit to particular groups of investors. He is effectively interfering in the market. Is that his job?

    Let's imagine that I enter into an employment contract with a company, and this contract says that in certain circumstances I can leave and get a payout (let's say 12 months salary).

    This payout is to compensate me for the time it will take for me to find another job. The cost and risk in known up front to both parties; the company and me. The contract is signed by authorised signatories of the company, who get this authorisation from the directors, who ultimately are authorised by the shareholders to make decisions about hiring and compensation policy.

    Now along comes a judge, who says "I think that this contract is detrimental to the share price, ergo detrimental to the finances of certain shareholders; I have decided to unilaterally modify or annul this contract as I see fit".

    The judge is appointing himself to be a kind of super-president of the company: not elected to the board by shareholders, but with some kind of moral right to interfere in the company's policies and practises.

    Please feel free to correct me if I've got hold of the wrong end of the stick, but from reading TFA, that is my interpretation.

    K.

    • by whizzter (592586)

      I think the argument for this would be that since the shareholders did fire the board that made the deal the judge considers the act of signing the contract something done agains't the will of the owners/shareholders and has taken it upon himself to reverse this.

      Think of it in another way, what if the CEO/Chairman of a listed company would transfer all the funds of that company into his own account. He did have authority to access the accounts, but the act itself would certainly be considered theft.

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