Icahn: Yahoo made Microsoft buyout ‘practically impossible’

Yahoo may have resumed negotiations with Microsoft, but billionaire investor Carl Icahn remains unhappy: he still wants to fire the company’s board and replace it with more Microsoft-friendly directors. Judging by a letter he sent to the Yahoo board today, he has a surprisingly good reason, too.

According to Icahn, CEO Jerry Yang and most of the board members deliberately sabotaged the negotiations by setting up a “doomsday machine” to push Yahoo employees to quit in the event of a buyout:

A complaint that I became aware of yesterday (details Yahoo fought to keep under seal) . . . states: “Viewing employee retention as Microsoft’s Achilles heel, Yang engineered an ingenious defense creating huge incentives for a massive employee walkout in the aftermath of a change in control. The plan gives each of Yahoo’s 14,000 full-time employees the right to quit his or her job and pocket generous termination benefits at any time during the two years following a takeover, by claiming a “substantive adverse alteration” in job duties or responsibilities.” The damage to Microsoft “is compounded by the fact that Yahoo’s thousands of engineers, known as “Technical Yahoos!,” have detailed job responsibilities and qualifications.”

Icahn goes on to say Yahoo “conveniently neglected” to tell the employees that Microsoft “had earmarked $1.5 billion of retention incentives (representing over $100,000 per employee) meant to allay any employee concerns.” According to Icahn, the move goes against the board’s official claim that it negotiated with Microsoft in good faith. He also claims backing off the “doomsday machine” could have allowed Yahoo to get an even higher offer from Microsoft.

Comments closed
    • A_Pickle
    • 11 years ago

    Okay, I just thought of this, but…

    …Icahn haz yahoo nao?

    • lex-ington
    • 11 years ago

    ummmm. . . . why exactly is a /[

      • DreadCthulhu
      • 11 years ago

      How do you think he became a billionaire in the first place? By making good investments. And the Microsoft buyout offer would have been good for all Yahoo shareholders, since the offer was for much more than Yahoo is worth.

      • UberGerbil
      • 11 years ago

      You’ve completed one first-person-shooter — why play another?

      Money is just a way of keeping score. Ichan enjoys the thrill of the chase. And he’s got a huge ego. He likes being a guy the market fears, admires, and is forced to listen to. (He also claims to dislike market inefficiencies, but only when it suits him).

    • herothezero
    • 11 years ago

    M$ just saved a lot of money. No one cares about Yahoo…no one. Not even Yahoo, apparently.

    • A_Pickle
    • 11 years ago

    AAAAAAARRRRGGGGGHHHH.

    I hate Yahoo. Screw that company, I want it to die. Nuke the headquarters for all I care. Them and their internet crapware can go to hell.

    • VILLAIN_xx
    • 11 years ago

    yahoo should make an official statement..

    “what now, biatch?”

    • ssidbroadcast
    • 11 years ago

    “They look like a couple of yahoos…”

    Extra points to anyone who knows what movie that’s from.

      • CampinCarl
      • 11 years ago

      Problem Child, I think?

        • ssidbroadcast
        • 11 years ago

        + 5 points!!

      • GodsMadClown
      • 11 years ago

      -15 points for watching that stupid movie…

    • BoBzeBuilder
    • 11 years ago

    They are smarter than you. Whatchya ganna doo?

      • crazybus
      • 11 years ago

      Act a foo! Or so it seems.

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