Icahn Pressures Yahoo to Dump Severance Plan

June 5, 2008 6:45:19 AM PDT
Investor Carl Icahn is continuing to keep the pressure on Yahoo. He's urging its board to scrap an employee severance plan that drove up the potential costs of a Microsoft takeover. If Yahoo's board sticks to the plan, Icahn indicates that he will follow through on his three-week-old threat to ask shareholders to fire the board at the company's August 1st annual meeting.

That move would also target Yahoo CEO Jerry Yang, who co-founded the Internet pioneer 14 years ago. Yang pushed for adoption of the severance program, which could add more than 2 billion dollars in costs if Microsoft pulled off a successful takeover.

Microsoft CEO Steve Ballmer withdrew an oral offer to buy Yahoo for $47.5 billion, or $33 per share, a month ago after Yang asked for $37 per share - a price that the company's stock hasn't reached since early 2006.

Yahoo had no immediate comment on Icahn's critical letter. The board has repeatedly said it remains open to selling Microsoft at a price that recognizes the company's full value.