Vicious and public proxy fight for control of Yahoo ended with the company and Carl Icahn agreeing on nominal changes to Yahoo’s board.

Investors who may have hoped for a change of command at Yahoo leading to a lucrative payout in a deal with Microsoft will have to set their sights on something else. Yahoo announced a pact with corporate raider Icahn to expand Yahoo’s board, but keep Yahoo’s insiders in control.

Following the 2008 annual meeting, the Yahoo! Board will be expanded to 11 members. Carl Icahn will be appointed to the Board and the remaining two seats will be filled by the Board upon the recommendation of the Board’s Nominating and Governance Committee from a list of nine candidates recommended by Mr. Icahn, which includes the eight remaining members of the Icahn slate of nominees and Jonathan Miller, currently a partner in Velocity Interactive Group and former Chairman and CEO of AOL.

As part of the settlement agreement, Mr. Icahn, who owns an aggregate of 68,786,320 shares, or 4.98% of Yahoo! common stock, has agreed to withdraw his nominees for consideration at the annual meeting and to vote his Yahoo! shares in support of the Board’s nominees.

Icahn, or whoever blogs for him, hasn’t gotten around to updating the Icahn Report blog run by the investor. His last post decrying the golden parachutes for executives dumped by their companies still holds the top spot there.

Posted on Monday, July 21st, 2008 at 10:56 am. Permalink