By Michael Liedtke
Thursday, June 5, 2008
SAN FRANCISCO, June 4 -- Dissident investor Carl C. Icahn escalated his attacks on Yahoo's board Wednesday in an acerbic letter demanding that the directors scrap an employee severance plan that drove up the potential costs of a Microsoft takeover.
Icahn indicated that if the board clings to the severance plan, he would follow through on his threat to ask shareholders to fire the board at the company's annual meeting Aug. 1.
That move would also target Yahoo chief executive Jerry Yang, who co-founded the Internet company 14 years ago and pushed for the adoption of the severance program. The plan could trigger $464 million to $2.4 billion in employee payments if Microsoft pulls off a takeover at a price from $31 to $35 per share.
Those estimates were drawn from internal Yahoo records unsealed Monday in a shareholder lawsuit alleging that Yang and the company's board improperly spurned the software giant.
In a letter responding to Icahn, Yahoo Chairman Roy Bostock accused the billionaire investor of not having any strategy for running the company if it's not sold to Microsoft. Bostock also defended the severance plan as the best way to retain and attract employees during the uncertainty caused by Microsoft's takeover attempt.