Yang, 40, agreed to step down as CEO and resume his former advisory role on Nov. 17 after rejecting Microsoft’s bid. The prospect of succeeding the Yahoo co-founder may not appeal to candidates fearful of second-guessing, said John A. Challenger, CEO of Challenger, Gray & Christmas Inc., a Chicago executive- placement firm.

“There’s certainly the potential for trouble,” said Heath Terry, an analyst at Arlington, Virginia-based FBR Capital Markets Corp. who has an “underperform” rating on the shares. “In the minds of Jerry, most of the board and employees, this is still Jerry’s company.”

Taiwan-born Yang will serve as CEO until a new one is hired, said Kim Rubey, a company spokeswoman. He wasn’t available for comment, she said. Yang’s full-time job as Chief Yahoo focuses on global strategy, products and technology, according to a company blog. He’ll also continue as a Yahoo board member.

Mozilla Corp.’s Mitchell Baker, Quiznos Corp.’s Gregory Brenneman and Hasbro Inc.’s Alfred Verrecchia are among 216 CEOs stepping down this year and remaining with their companies in another capacity, according to a survey this month by Challenger’s firm. That’s 22 percent fewer than in 2007 and 40 percent under 2006, the study found.

“Boards are more assertive,” said Challenger, 53. “They want to move the person out.”

More than 90 of those who stayed were named chairman or co- chairman. Challenger’s study reported that 1,257 CEOs of publicly traded and closely held U.S. companies lost their jobs in 2008, 10 percent more than last year. The higher number reflects the economic slowdown and falling stock prices, Challenger said.

The possibility for interference increases when the top manager who stays on is also a founder such as Yang, according to Allen Geller, managing director of Raines International, a New York-based executive-search firm.

“Think of it as Big Brother watching,” he said. “That’s what it could be like.”

The path to Yang’s removal as CEO began in February after he rejected Microsoft’s US$31-a-share offer, a 62 percent premium to Yahoo’s price at the time. Yang said the company was worth more.

Carl Icahn and other shareholders pushed for Yang’s resignation as prospects for the deal waned. The Redmond, Washington-based software maker reiterated on Nov. 19 it wasn’t interested in buying the company. Icahn bought 6.78 million Yahoo shares between Nov. 24 and Nov. 26, raising his total stake to 75.58 million shares, according to a regulatory filing.

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