Buying up billions of dollars in Yahoo shares and calling for a new board and renewed merger negotiations with Microsoft made corporate raider Carl Icahn come off daring and bold, if slightly confused. Now, with his latest later to Yahoo chairman Roy Bostock, Icahn just seems whiny. He begins his letter:
Dear Roy, After reading Yahoo!'s press release put out on Friday in response to my letter of that morning, I cannot help but wonder if you even read my letter.
After reading Yahoo!'s press release put out on Friday in response to my letter
of that morning, I cannot help but wonder if you even read my letter.
Again, Yahoo! keeps repeating misstatements in the hope it will convince its
shareholders that these misstatements are valid. I cannot understand why the
Yahoo! board feels so strongly about its "poison pill" severance plan and why it
continues to refuse to rescind it. How can you continue to repeat that your
severance plan is in the best interests of shareholders and employees? Indeed,
Yahoo!'s own compensation advisor called the severance plan "nuts." Is it not
true, as the shareholder complaint stated, that Microsoft's CEO earmarked $1.5
billion for employee retention (a benefit you neglected to tell your employees
about)? Is it not better to incentivize employees to stay in their jobs than to
quit? Instead of just continuing to repeat the mantra that we have made an
inaccurate interpretation of your severance plan, why do you refuse to go into
detail as to why our interpretation is incorrect? Additionally, a New York paper
reported this weekend that "sources close to Microsoft said the severance plan
was a "big issue" when deciding what price they could pay for Yahoo!"
In your press release from Friday, you stated again that I do not have a
credible plan for Yahoo! Did you even bother to read my letter, which went into
great detail on what measures I would ask the new board to take? Ironically,
while you keep inquiring about my plans, it is interesting to note that Yahoo!'s
board has been busy reaping great compensation benefits. Indeed, you made
approximately $10,000 per week last year - not bad for a board member. I believe
most of your shareholders would be interested in seeing your time sheets -
especially in light of the fact that, in my estimation, most of your so-called
"plans" over the last few years have been failures. Remember the old adage -
those who live in glass houses should not throw stones. Perhaps most
importantly, under my plan, I would ask the Board to bring in a talented and
experienced CEO to replace Jerry Yang and return Jerry to his role as "Chief
Yahoo!" It is extremely important to note that Google hired a great operator as
a CEO who helped to transform the Company into a giant at the expense of Yahoo!
According to publicly available financial information, while Google's income
from operations grew 59% per year over the last two years, Yahoo!'s income from
operations shrank 21%. What was the board doing over this period? Where was
their great "plan"? I believe a new CEO with operating experience might well
have had and might still have a very salutary impact on Yahoo! I ask again what
your great "plan" has been over the last few years. Why did you permit Google to leave you in the dust?
I outlined a number of questions in Friday's letter. Why don't you do me the
courtesy of answering my questions as I have answered yours?
CARL C. ICAHN