Yahoo board has investors' ire, proxy firms' confidence -- sort of

Despite widespread investor discontent, the recommendations are in and -- for the most part -- Yahoo's board passed.

RiskMetrics Group this morning endorsed Yahoo's slate of directors, though it expressed some reservations about its decision to adopt a controversial severance compensation plan and about the way the board handled failed merger talks with Microsoft.

According to the report from the shareholder advisory firm, Yahoo investors should reelect Chief Executive Jerry Yang and seven other directors.

The endorsement came on the heels of the board's truce with billionaire activist Carl Icahn, which gave Icahn a seat at the table and allowed him to recommend two other candidates to join him, one of whom is likely to be former AOL Chairman and Chief Executive Jonathan Miller. The settlement also calls for the board to be expanded.

RiskMetrics said the settlement should allow the directors to tackle compensation issues and the strategic direction of the struggling Internet company.

On Wednesday, Egan-Jones Proxy Services recommended that Yahoo support the Yahoo board at the annual meeting on Aug. 1. It parted company from rival advisory group Glass Lewis & Co., which on Tuesday raked three Yahoo directors over the proverbial coals. Glass Lewis recommended booting Chairman Roy Bostock, above, and directors Ron Burkle and Arthur Kern (both are on the compensation committee), for the aforementioned severance plan, which triggered payouts to fired employees if Microsoft succeeded in its takeover attempt, and for paying executives too much.

Of course, the recommendations from the advisory firms don't matter much anymore now that Icahn is no longer attempting to oust the Yahoo board and fire Yang.

Instead it's Microsoft taking its turn on the hot seat with its online ambitions in disarray and with the departure of its online business chief.

Just another episode in "As the tech world turns."

-- Jessica Guynn

Photo: Duke University