July 18, 2003 10:05 AM PDT
Semel cashes in on options
Semel, whose compensation is primarily based on stock options, sold 437,000 options priced at $9.24 a share and 62,500 options priced at $16.46 while Yahoo's stock traded at an average of $32.30 a share. These 500,000 shares, or 3.3 percent of Semel's total options and holdings, netted around $11 million in profits before taxes and broker fees.
Yahoo spokeswoman Joanna Stevens declined to comment on Semel's planned use for the proceeds, noting that "this is a private transaction by Terry."
After the sale, Semel holds 13.3 million option shares on top of the 1 million shares he bought shortly after joining Yahoo.
The move comes shortly after Yahoo reported quarterly earnings that met Wall Street's expectations. The company's stock has made a bull run over the past 52 weeks, ranging from a low of $8.94 to a high of $35.79.
Much of Yahoo's financial profitability over the past five consecutive quarters has come from a successful partnership with Overture Services, which contributed to 19 percent of Yahoo's total revenue last quarter. Yahoo on Monday announced it will buy Overture for $1.63 billion in cash and stock.
The stock run-up has padded the coffers of Yahoo's top executives and business partners such as SBC Communications.
Nonetheless, Semel remains skeptical of stock options as a form of compensation. The CEO scaled back the number of stock options awarded to Yahoo employees from 5.6 percent of the company's outstanding shares when he joined the company in May 2001 to 1.4 percent in 2002. Instead, the company will offer employees a mixture of stock and cash bonuses.