Yahoo Shareholders Sue Board for Golden Parachutes

[flashl]

Source: WSJ

Yahoo Shareholders Sue Board for Golden Parachutes

According to a lawsuit filed last week by two Yahoo shareholders (both pension plans in Detroit), the Yahoo board has recently used golden parachutes for a different, improper reason: to make the proposed acquisition by Microsoft more unattractive.

The complaint, filed in the Delaware Court of Chancery by Bernstein Litowitz’s Mark Lebovitch and Brett Middleton, alleges, among other claims, that Yahoo recently put in place a severance plan that offers packages — worth up to two years’ salary for top exeuctives and a minimum of four months to all other employees — to all of Yahoo’s employees. (Find the complaint and accompanying motions here.) Here’s an excerpt from the complaint:

The creation of the Severance Plans are part of an effort to thwart Microsoft. They cannot be reconciled with Yahoo’s admission, on January 29, 2008, that it had a bloated workforce and would be cutting 1,000 jobs, or 7.1 percent of its workforce. . . . It has been estimated by a market commentator that the Severance Plan would cost an acquirer at least $1 billion, and up to $3 . . . .

WSJ

Read more: http://blogs.wsj.com/law/2008/02/26/yahoo-shareholders-sue-board-for-golden-parachutes/

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During all of these golden parachute stories, I have been wondering 'Where is the heck are the shareholders?'

[Deja Q]

1. 'Where is the heck are the shareholders?'

Getting golden showers?