Yahoo Chairman Roy Bostock refutes accusations from investor Carl Icahn that the company used attractive severance packages to thwart a takeover by Microsoft. Yahoo created a new severance package for employees after Microsoft
announced a $44.6 billion hostile takeover on February 1st that would have cost the software company up to $2 billion more after the acquisition.
The package would have paid between four months and two years severance pay for those who left the new company for “good reason,” depending on their position.
"I have constantly complained about how far CEOs and boards will go in order to retain their jobs, yet even I am amazed at the length Jerry Yang and the Yahoo board have gone to in order to entrench their positions and keep shareholders from deciding if they wished to sell to Microsoft," Icahn wrote in a letter to Bostock.
Bostock denies that the severance package was a means to stave off acquisition and retain his and the other board members’ positions.
"In fact, the plan was adopted in order to protect the value of Yahoo in anticipation of a possible acquisition by Microsoft which would have resulted in a lengthy regulatory review and a significant period of uncertainty for our employees," Bostock wrote in a response to Icahn.
Bostock criticizes Icahn of eagerly wanting to merge with Microsoft without having the long-term future of the Yahoo in mind.
Icahn is currently seeking to expel Bostock along with CEO Jerry Yang and the other board members, replacing them with his own appointees in order to facilitate the Microsoft merger.
Until such a change happens, though, it looks as though the two companies will exist separate of one another.
By Danny Scuderi