Shareholders also rejected a proposal by the Washington, D.C.-based United Brotherhood of Carpenters Pension Fund to establish a pay-for-superior-performance standard in the company's executive compensation plan for senior executives. The proposal called for linking the level of senior executive pay to the company's performance relative to other companies in its sector. Almost 35 percent of the shares were voted in favor of the proposal, and 62.3 percent against it.
Yahoo's board opposed the proposal, saying that although it believes that a link must exist between executive pay and company performance, the board needs the flexibility of weighing other considerations as well.
This has been an issue at Yahoo, which has had generally underwhelming financial performance in the past two years, particularly when contrasted with Google's stellar revenue growth and profitability.
Semel has gotten most of the blame as Yahoo has failed to capitalize on the fast-growing market of search advertising, the engine of Google's financial success.
Semel has also been faulted for failing to acquire hot Internet startups that ended up getting scooped up by rivals, as was the case with News Corp.'s acquisition of MySpace and Google's purchase of YouTube.
At Tuesday's meeting, some shareholders pelted Semel with blunt questions and in-your-face criticism, which lead to some tense exchanges.
A shareholder said he had been disappointed that Semel hadn't apologized to shareholders for the company's financial performance.
"Do you still have the fire in the belly to do this job?" the man asked Semel.
"Absolutely. Yahoo has more opportunities going forward than perhaps any other time in its history," Semel replied, as he began to answer the shareholder's questions.
The two sparred a bit later, when, after hearing Semel's answers, the shareholder asked the CEO: "Are you saying you're happy being a stronger number two than being number one in search?"
"I don't think I said that at all, and I think you're being a little cute about that," Semel retorted.
After Semel and co-founder Jerry Yang addressed another of his questions, the shareholder shot back at Semel, saying: "I wasn't trying to be cute. I'm a shareholder. I love this company.... I have some simple questions. If I didn't love this company, I'd sell my shares and show up next year" at the Google shareholders' meeting instead.
Semel then thanked him for his commitment to the company. "I take your questions as being constructive. I think when you began it was a little hard to judge that," Semel said.
This story was updated on June 12, 2007
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