Yahoo and Carl Icahn avoided a proxy battle by agreeing to a deal that will place the billionaire investor on Yahoo's board of directors.
Yahoo will expand its board from nine to 11, with Icahn filling a seat and the remaining two positions being chosen from a list that includes Icahn's original candidates. Eight of Yahoo's existing board members will stand for re-election during August 1 shareholder meetings. As part of the deal, Robert Kotick will not stand for re-elections at the annual meetings.
"This agreement will not only allow Yahoo to put the distraction of the proxy contest behind us, it will allow the company to continue pursuing its strategy of being the starting point for Internet users and a must buy for advertisers," said Yang, Yahoo's chief executive, in the statement.
Icahn, who owns 4.98 percent of Yahoo and had been pushing for a Microsoft purchase of Yahoo for weeks, agreed to vote his shares in support of the Yahoo board's nominees.
"While I continue to believe that the sale of the whole company or the sale of its search business in the right transaction must be given full consideration, I share the view that Yahoo's valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders," said Icahn in a statement. "I believe this is a good outcome and that we will have a strong working relationship going forward."
Icahn began his battle with Yahoo after the search engine giant rejected an unsolicited bid from Microsoft valued at $4.6 billion.