Proxy firm advice: Curtail Yahoo executive pay

The third of the big three proxy advisory services has issued its recommendation on how investors should vote during Yahoo's upcoming election. The advice: send a message about Yahoo's overpaid top brass.

With investor Carl Icahn and Yahoo coming to terms, there no longer is an opposing slate running against Yahoo's board of directors. But there's still going to be a vote, and Proxy Governance thinks it's a good time to take a stand.

"The average three-year compensation paid to the named executives is 480 percent above the median paid to executives at peer companies," Proxy Governance said in a statement about its advice on Friday. "In light of Yahoo's relatively weak financial performance, we therefore recommend that shareholders withhold votes from the members of the compensation committee."

"Given the exorbitant pay levels awarded to the company's executives in the face of its weaker performance relative to peers, we believe that a stronger emphasis on conditioning certain compensation awards on performance relative to the company's peers is warranted," the firm added.

The two other firms, Glass Lewis and RiskMetrics, issued opinions already. Glass Lewis also recommended voting against the compensation committee members: Chairman Roy Bostock, and directors Ron Burkle and Arthur Kern. However, for practical purposes, it's unlikely the directors actually will be ousted.

The firms issue recommendations to their clients on how to vote on proxy matters. These clients include mutual funds, pension funds, and asset management companies, which often hold large blocks of companies' stock.