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Investors Revolt Online

Shareholders flex their muscles on a variety of subjects, and the Internet is often their forum.

To see the new face of shareholder activism, go to YouTube, MySpace or the blogosphere. That's where corporate consultant Eric Jackson, who owns 96 shares of Yahoo, launched a campaign last year to make the struggling Internet company more accountable to investors.

This year, he marshaled 135 investors holding about 2.2 million shares to persuade the company to accept Microsoft's (or some other bidder's) takeover offer. "We want a deal at the highest price, and we're ready to tender our shares," he says.

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The Internet may increase activism among individual investors, says Patrick McGurn, a proxy expert at RiskMetrics Group. But online or not, shareholders big and small are putting corporate boards on the hot seat this annual-meeting season, expressing their views on everything from executive pay to the subprime-mortgage meltdown.

Some campaigns aim to unseat board members. The CtW Investment Group, which is affiliated with a coalition of labor unions, wants board members at six financial firms, including Citigroup and Merrill Lynch, to explain what they did to manage subprime-loan risks. Says CtW's Mike Garland: "Absent compelling explanations, we'll recommend that shareholders vote against reelection."

Other activists want to put specific proposals up for shareholder vote -- or at least get management to address the issues involved. "Say on pay" resolutions call for a thumbs-up or a thumbs-down on executive compensation. Other hot-button issues this year include political contributions and climate change.

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