Yahoo CEO Bartz to receive $1 million salary
Updated at 5:20 p.m. PST, with comments from executive recruiter Jon Holman.
Yahoo is providing its new CEO, Carol Bartz, with a $1 million base salary, as part of a lucrative $19 million compensation package for the former Autodesk executive, according to a filing Thursday with the U.S. Securities and Exchange Commission.
Under the four-year employment contract, Bartz, 60, will also receive an annual equity grant valued at approximately $8 million in February, the filing stated. This grant will be doled out at the same time other Yahoo executives receive their annual equity grants.
And like most executives who leave behind unvested stock options to take a new job, Bartz will also be compensated for forfeiting her stock grants and post-employment medical coverage that she left behind at Autodesk. That compensation will come in the form of $10 million, with a quarter of it paid in cash and the remainder in Yahoo restricted stock that will vest through 2009.
In addition to her $19 million compensation package, Bartz will also be eligible for an annual bonus of up to $4 million above her base salary, if she hits certain targets, according to the filing.
"This compensation package is maybe a little on the rich side, but it's definitely not out of whack," said Jon Holman, who heads the executive recruiting firm The Holman Group.
Given that Yahoo is a turnaround situation and a multibillion-dollar company, Holman noted, Bartz's compensation package is relatively in line for a CEO of her caliber.
Bartz may also be eligible for 5 million Yahoo shares, if she can get the company's under-pressure stock price to rise a certain percentage within the next four years. Bartz will have a seven-year period to cash in those eligible shares.
But there is one aspect of the 5 million share payout that is unusual, Holman noted.
Under the employment agreement, Bartz can potentially walk away with no vested options after a four-year period, or a tidy sum of more than $100 million, if the exercise price were set today at $10 a share.
The compensation plan calls for Yahoo's stock to increase by a certain percentage at various intervals over the four-year period. But the unusual part of the plan is that the shares will not vest at all, if the stock does not reach those various levels.
Typically, stock options will vest, regardless of the trading price, on a scheduled basis. The vesting, however, may accelerate, or the number of shares eligible for vesting may increase, if an executive is able to achieve and maintain a company's stock price at a particular level.
But under Bartz's compensation plan, she could theoretically walk away with none of the 5 million shares vesting, Holman noted.
"This provision, while not unheard of, is not common," Holman said.
Dawn Kawamoto covers enterprise security and financial news relating to technology for CNET News. E-mail Dawn. 
Show me the walking on water!
I bet Yahoo is in serious trouble in 4 years and this expensive figurehead will not save it in the least.
But, she will walk away with millions before all the money is gone.
If I owned Yahoo, it would be on a sell order now.
Totally Insane...
Thats the problem is corporate America, during tough times, the actual people who work hard get laid off while management gets paid 10X-30X the average worker.
This is the very thing that is wrong with western civilization.
The people at the top don't work any harder than the people at the bottom, yet they get paid anywhere from 10x as much to 100x (more in some cases),
Makes me sick just thinking about it.
How about give her 450K, and wait and see what you do for me kind of attitude?
If she works until retirement age of 62.5 she will have cleared about 30 million+ if the stock stays at $11 She could probably buy a robot body for just 20 months work. Nice.
Of course idiot decisions do tend to lower the value of your stock somewhat. Maybe a nice McMansion in the burbs somewhere is more like it.
By the way, anyone seen the Autodesk Stock Price lately? They are getting hammered down and down and down. Coincedence? mmmmm.....
be careful with all the jalousie, stuff like; what about the workers? well, yahoo had to fire a whole lot of people, if she manages to get yahoo to hire a bunch of people again ... well, then she's worth every penny isn't she?
I wish companies would stop paying for pedegrees and figure out how to find talent. I'm not saying she don't have talent, I am saying that there is a lot of talent out there that's never tapped because Wall Street types can't find it without the pedegree pointing the way.
The nature of her packages tells me that the Yahoo board isn't seriouse about Yahoo living up to it's potential (and it's already profitiable). No doubt her goals are short term, money related, and worthy of GM's way of thinking and not Toyota's.
Well guess what? They are all over paid.
The 1 million - absolutely, I can see it.
That many millions in options? Come on. You're laying people off, and you have stockholders - this is the stockholders money, not yours to do with as you please.
The "norm" that CEOs and upper management are overpaid has to be stopped. I know that Government is supposed to stay out of private industry (so much for that with the "bailout"), but Government is also supposed to be looking out for it's citizens - the very same citizens who in many cases are being taken advantage of by these companies.
This has gotta stop.
Charles Whealton
- by rgegret January 23, 2009 8:51 AM PST
- In the face of what has happened during 2008 in the "larger than life" company's, this smacks in the face of stupidity. Each day we read about major companies laying off thousands of hardworking dedicated people to trim costs and improve upon their operating structure. The board of directors that approved this compensation package should be taken out and summarialy shot.
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