Yahoo activist calls for board battle compromise

By Eric Auchard and Anupreeta Das

SAN FRANCISCO/NEW YORK (Reuters) - A dissident shareholder will on Monday call on Yahoo Inc to compromise and accept a mixed board of directors drawn from among company nominees and a rival slate backed by Carl Icahn.

Eric Jackson, founder of the activist hedge fund Ironfire Capital and leader of the grassroots shareholder group Yahoo Plan B, said on Sunday he would encourage his loose-knit group to elect five Yahoo directors and four Icahn nominees.

"It's become clear over the last two weeks that many shareholders are reluctant to support the entire list of Icahn nominees," Jackson said in a statement to be issued on Monday.

The 'Plan B' group is made up of 150 Yahoo stockholders representing 3.2 million Yahoo shares. Members of the Web-based activist group of small shareholders vote individually rather than as a group, Jackson said.

Separately, a source familiar with the thinking of Yahoo's board of directors said they see no need to compromise with Icahn and accept some of his rival slate as a way of defusing the proxy battle by Icahn to displace Yahoo's entire board.

The moves come in the busy final days before an August 1 showdown for control of Yahoo. Several proxy advisory firms are expected to weigh in with recommendations to investors on whether to support the Yahoo or Icahn camps.

Meanwhile, Yahoo is expected by many Wall Street analysts to report weak quarterly results on Tuesday in the face of slackening demand by some key corporate advertisers.

Yahoo's position was bolstered on Friday when fund manager Bill Miller, chief investment officer of Legg Mason, said he would support Yahoo's existing board at the August 1 annual shareholder meeting in Silicon Valley. Legg Mason recently held about 60.7 million Yahoo shares, about 4.4 percent of those outstanding.