SiliconBeat

Rackable Systems, the Milpitas maker of energy-efficient servers used in data centers, said earlier this week that results from its shareholder meeting late last month show that it prevailed over dissident shareholder Richard Leza.

Leza was so incensed by the compensation doled out by the board over the last year — including stock-based pay for the company’s new chief executive valued at nearly $13million — that he invested a good deal of his own time and money to wage a proxy battle tohave himself and another outside candidate elected to Rackable’s board, and to pass a proposal he made to give shareholders an opportunity each year approve the top executive’s pay.

Both efforts failed. However, the votes were closer than the company let on last week when it issued a press release saying it was “gratified” to have its “leadership and direction validated” by shareholders, noting that “only 3% of votes were cast in favor of the dissident’s Board nominees.”

What the release doesn’t say is that the size of the votes cast against the three incumbent directors who serve on the board’s compensation committee were hardly ringing endorsements, according to an epilogue to the struggle that Leza filed with the SEC Wednesday.

Forty-nine percent of the voted shares were cast against compensation chair Charles Bosenberg, and, while he did receive a bare majority of the total shares actually voted, he got only 28.5 percent support of all eligible shares as a sizable number of shareholders sat on the sidelines.

Votes against Rackable’s chairman and fellow compensation committee member Ronald Verdoorn totaled 46.8 percent, and votes against the third member of the committee, Garry A. Griffiths, totaled 45.6 percent.

As for the “say-on-pay” shareholder proposal, while Rackable was procedurally accurate when it said that “shareholders voted to reject” it, the numbers show that more votes were actually cast for the measure — 8,161,894 — than against it — 7,725,566 — but that the number of shares that abstained — 1,349,816 — effectively counted as “no” votes.

( These are “pre-certified” results from IVS Associates, the independent inspector of the
election, that were passed on to us by Leza. Our request for the vote totals from Rackable
went unanswered.)

Rackable is is in the midst of a turnaround, having hired a new CEO, along with a new chief financial officer, new executives for sales and marketing, operations, and products along with a new general counsel since May 2007.

“We will continue to monitor the situation closely over the rest of this year,” wrote Leza in a filing Thursday with the SEC, “particularly the stock price performance. Given the company’s press release describing this voting outcome as “resounding approval,’ we are left with almost no hope that anything will change.

Since Leza filed his proxy challenge in late February, Rackable shares have risen by more than half.