An employee severance plan put in place by Yahoo to protect workers after a merger with Microsoft should be rescinded immediately, according to a brief filed by plaintiffs in a shareholder lawsuit against Yahoo and its directors. The plaintiffs say the plan could skew the outcome of a proxy battle between Yahoo and the activist investor Carl C. Icahn for control of the company.
Lawyers representing two Detroit pension plans that are suing Yahoo asked a judge in Delaware to hold a trial to determine the fate of the plan ahead of the company’s Aug. 1 shareholder meeting. Legal experts said a trial could shine a light on Yahoo’s talks with Microsoft and affect the outcome of the proxy fight.
That plan sounds generous enough to qualify as a "poison pill" defense against acquisition.
Years ago, I worked for a firm that was targeted by a corporate raider. I proposed something similar, a golden parachute plan for management of all levels, as a way of making a hostile takeover unattractive. My idea didn't get any traction, and they ended up paying a premium to buy the raider's shares back.