I had no idea idea it would fall this much but I finally decided to stop pushing a rope by calling for change from the inside (as a shareholder). I voted with my feet. This board has the blood of its shareholders on its hands, and I hope they wear that scarlet letter stigma for a long time.

Yahoo!'s board has been dysfunctional for too long. More changes are needed, which is why I will vote "against" the re-election of Roy Bostock, Ron Burkle, Art Kern, and Eric Hippeau at next week's annual meeting

Jackson's bullet points on "Why I'm Voting "Against" Bostock, Burkle, Kern, and Hippeau," are below.

• Yahoo!'s stock price is at the same level it was 4 years ago. That's a zero % return for loyal shareholders, while the market has gone up and their largest competitor has soared.
• Excessive compensation continues to persist at Yahoo! Last year, the focus was on Yahoo!'s CEO compensation and how it ranked among the highest for Fortune 500 companies, even as the stock had dropped 30% that year. Jerry Yang has agreed to be paid $1 a year since he took over as CEO, yet Yahoo!'s Compensation Committee has continued to pay its outside directors approximately $500,000 per year. Google's outside directors on average receive pay of $250,000 per year.
• Last year, Yahoo! shareholders voted 34 - 36% against the re-election of Messrs. Bostock, Burkle, and Kern (the members of Yahoo!'s Compensation Committee). To put that vote in perspective, remember that Michael Eisner (the year he battled Roy Disney) received 42% of votes cast against his re-election. Yahoo! chose to ignore the will of shareholders and keep all 3 men on. Based on what's occured in these past 12 months, I believe that choice was unwise.
• Kern and Hippeau have served on this board for 12 years. That's too long. It would be next to impossible for anyone to remain "independent" after serving on a group for so long. There are other voices with experience on this board.
• The breakdown in talks with Microsoft still baffles shareholders. The visceral outrage all Yahoo! shareholders felt when discussions broke down with Microsoft on May 3rd still leaves a bad taste in all our mouths as shareholders. This board claims Microsoft never was serious in its buyout offer for the entire company. Yet, they chose not to engage in discussions with Microsoft for 5 weeks after the offer was made - instead, scurrying around to approve a lavish severance package so as to increase the costs to Microsoft of completing the acquisition.

(Photo by Oscalito)

Jackson told the AP he plans to introduce an alternative slate of directors and turn the July 3 meeting "into 'Independence Day' for Yahoo's shareholders."

It's hard to believe the board could let this happen. I think they completely misconstrued the situation and thought, 'Microsoft is rich, so let's soak them.' They were bluffing all the way and got caught.

One week after Eric Jackson stood up during Yahoo's shareholder meeting to ask the CEO to apologize to shareholders, Terry Semel stepped down. Now, less than a week after releasing his "Motorola Plan B", rumors of Ed Zander's departure surface. Both companies were languishing relative to their competition; both CEO's were criticized from all directions. But rarely do shareholder proposals succeed, and both CEOs have withstood more powerful opposition (Carl Icahn was unsuccessful in his bid to unseat Zander earlier this year). It will be difficult for the shareholder activist to resist taking credit for taking down two CEOs within a week in less than a month... even if the reasons are larger than one man. Underperforming CEOs beware, Eric Jackson has a list. You might be next. [Photo: Reuters]