Yahoo (YHOO) is implementing "proxy access" -- an increasingly used strategy making it easier for longtime shareholders to nominate a board member -- as the company girds for what's being called an epic proxy battle.
Yahoo said that it had amended its bylaws to allow a stockholder or group of as many as 20 investors that hold at least 3% of its shares continuously for three years to nominate directors, according to a report in the Wall Street Journal.
The move goes into effect after Yahoo's 2016 annual meeting, which is expected in June or July. Activist hedge fund investor Starboard Value has nominated its full slate of directors under Yahoo's existing bylaws. The newly announced proxy-access change wouldn't have affected Starboard's ability to replace the directors even if proxy access had been in place for the upcoming meeting, Patrick McGurn, special counsel for proxy advisory firm Institutional Shareholder Services, told the WSJ.
About 21% of S&P 500 companies have adopted proxy access, up from about 1% in 2014, according to ISS.
Apple (AAPL) amended its company bylaws in December to make it easier for shareholders to make board nominations. General Electric (GE) and AT&T (T) are among other companies that have instituted proxy access, said the WSJ, with 117 U.S. companies embracing the change last year.
At the annual meeting, Yahoo shareholders will vote on whether to replace all nine board members with a slate nominated by Starboard, which wants to see change. Starboard said last week that since Yahoo CEO Marissa Mayer and others in the company's leadership "have repeatedly failed shareholders," the hedge fund wants to sweep out all of the ailing Web company's directors and replace them with its own slate.
Yahoo advisors have contacted potential buyers, including Verizon Communications (VZ), IAC/InterActivecorp (IAC) and Time (TIME), as well as private-equity firms TPG and KKR (KKR).
Yahoo stock rose a fraction Thursday but was down a fraction in midday trading in the stock market today, near 36.
