Yahoo!’s board of directors won strong backing from shareholders at its annual meeting yesterday, with Jerry Yang, the internet search company’s embattled chief executive and co-founder, receiving 85 per cent of the vote in his favour.

Shareholders representing nearly 76 per cent of Yahoo’s 1.38 billion outstanding shares voted in favour of all nine of the current directors, in what amounts to a ringing endorsement of their tough stance with Microsoft in this year’s talks on a merger.

Three members of Yahoo’s executive compensation committee — Chairman Roy Bostock, Ron Burkle and Arthur Kern — each received about 80 per cent in favour of re-election, with the remaining votes withheld in protest.

Mr Bostock earlier rejected calls for his resignation from shareholders who claimed that he had bungled the takeover offer by Microsoft.

At the meeting in San Jose, California, Eric Jackson, a shareholder who represents a group of investors with 3.2 million shares, asked Mr Bostock to step down. Mr Jackson told the chairman: “You are overpaid, you have overstayed your welcome, overplayed your hand with Microsoft. Will you do the honourable thing and step down?”

Mr Bostock then outlined Yahoo!’s position over the potential $47 billion (£24 billion) cash-and-shares takeover in May. “There was never any doubt about the position of this board and its openness to do a deal. At no point did the board, despite rumour or speculation, did we ever resist . We actively engaged with them,” he said. “We called the shots and we were deeply involved in the . . . process. There was never a conversation in more than 30 meetings when we did not discuss shareholder value.”

Yahoo! has been criticised for rejecting two approaches from Microsoft, the last of which valued the search engine at a 72 per cent premium.

Mr Bostock attacked Microsoft, claiming that its proposal to raise its offer was never made formally to Yahoo!. “They verbally, in an offhand comment, and this is important, they said: ‘There may be a few more dollars on the table.’ They never communicated this to the board or in writing.”

Mr Bostock said that he could not understand why Microsoft had abandoned its last offer in May to buy the search engine for $33 a share. “They withdrew,” he said, “and, to this day, I do not know why they did that.”

Microsoft insiders said that they had walked away after Yahoo! had threatened to hive off the most lucrative parts of its business and introduce a poison pill of excessive compensation packages for Yahoo! employees. Mr Bostock made no reference to such claims.

The chairman also insisted that the Yahoo! board had asked Microsoft to engage in more detailed discussions about a possible tie-up and had asked the software giant for its view of the regulatory implications of such a tie-up. “But they never significantly engaged with us,” Mr Bostock said.

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