June 2, 2006 4:40 PM PDT

Yahoo CEO to be paid $1 salary

Yahoo Chief Executive Terry Semel, the highest compensated executive in the San Francisco Bay Area last year at more than $56.8 million, will receive an annual salary of $1 through 2008, according to documents made public Friday by the U.S. Securities and Exchange Commission.

For the next three years, Semel also will be eligible to receive an annual bonus of up to 1 million shares and the option to purchase 6 million shares at an exercise price of $31.59 each as a retention incentive, under management compensation arrangements approved Wednesday by Yahoo's Board of Directors compensation committee.

The board of directors said it doesn't anticipate making any further equity grants to Semel in the next three years.

Semel was the highest-paid executive in the San Francisco Bay Area in 2004 and 2005, according to a survey released last week by the San Francisco Chronicle. Semel's salary and bonus were $600,000 last year, and total compensation, including restricted stock and the estimated value of options, was $56.8 million, down from $131.2 million the year before, the study found.

Some studies show that the average pay for chief executives in 2005 was between $10 million and $15 million.

The $1 salary follows moves by other tech executives, including Apple Computer CEO Steve Jobs. Google Chief Executive Eric Schmidt, and co-founders Sergey Brin and Larry Page, have also voluntarily agreed to cut their annual salaries down to that token sum. Their salary loss is more than offset by the millions the Google executives have made off stock sales.

Dan Rosensweig, Yahoo's chief operating officer, and Susan Decker, chief financial officer, each will continue to receive an annual salary of $500,000 through 2009, according to the SEC filing. Each will also be eligible for a $1 million bonus, the option to purchase 2.1 million shares of stock at $31.59 each and a performance award of 50,000 restricted stock units, the filing said.

Rosensweig's total compensation was $24.4 million last year and Decker's was $24.3 million, ranking them fifth and sixth, respectively, in the Chronicle's executive pay survey.

Yahoo Chief Technical Officer Farzad Nazem will continue to receive an annual salary of $500,000 through 2007, a potential cash bonus of $1 million, an option to purchase 900,000 shares at $31.59 each and 50,000 restricted stock units based on performance. He was ranked seventh with just more than $24 million in total compensation last year in the Chronicle survey.

General Counsel Michael Callahan received an option to purchase 330,000 shares at $31.59 each and 73,000 restricted stock units, according to the regulatory filing. He was ranked 119th in the Chronicle survey.

Yahoo's stock price has dropped more than 18 percent over the past year, but it has jumped nearly 300 percent in the five years Semel's been at the helm.

Yahoo posted first-quarter revenue in April of $1.09 billion, up 33 percent from a year ago, while net income was down year-over-year to $160 million on higher stock compensation expenses.

See more CNET content tagged:
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11 comments

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The art of crafting news headlines
Excessive executive salaries are a pet peeve of mine. Based on the info in the article, I would have written this headline as:

YAHOO CEO TO TAKE PAY CUT, FROM $56.8M to $56.2M
Posted by rtwaters (3 comments )
Reply Link Flag
not quite but still a huge chunk
Actually at today's stock price it is more like $36.9 million. Still
that is way more than a dollar. Of course, if his stock price
jumps above the minimum price set for the extra 6 million
shares he can buy, then of course he is gonna buy the extra 6
and exponentially increase his "salary" even further.

Just a bunch of "chump" change for an over inflated capitalistic
system with the market indirectly figuring out how much we are
gonna pay this schmuck for busting freedom of speech around
the world. Maybe he and the guys over at Google are taking this
deal in an effort to make the average stock purchaser think that
they are being a good citizen....NOT!
Posted by phrogdriver71 (52 comments )
Link Flag
The art of crafting news headlines
Excessive executive salaries are a pet peeve of mine. Based on the info in the article, I would have written this headline as:

YAHOO CEO TO TAKE PAY CUT, FROM $56.8M to $56.2M
Posted by rtwaters (3 comments )
Reply Link Flag
not quite but still a huge chunk
Actually at today's stock price it is more like $36.9 million. Still
that is way more than a dollar. Of course, if his stock price
jumps above the minimum price set for the extra 6 million
shares he can buy, then of course he is gonna buy the extra 6
and exponentially increase his "salary" even further.

Just a bunch of "chump" change for an over inflated capitalistic
system with the market indirectly figuring out how much we are
gonna pay this schmuck for busting freedom of speech around
the world. Maybe he and the guys over at Google are taking this
deal in an effort to make the average stock purchaser think that
they are being a good citizen....NOT!
Posted by phrogdriver71 (52 comments )
Link Flag
Give me a break
99% of his compensation ($56.8m last year) is/was based upon options, preferred stock grants, "percs", and bonuses. Dropping the salary components down to $1 is a trivial change. So based upon last year's stock prices, if he would have made this "token gesture" last year, his salary would have gone from $56,800,000 to $56,200,000. Give me a break, it's a PR move that doesn't even have a TRIVIAL impact upon his bottom line.
Posted by The Harper (41 comments )
Reply Link Flag
Give me a break
99% of his compensation ($56.8m last year) is/was based upon options, preferred stock grants, "percs", and bonuses. Dropping the salary components down to $1 is a trivial change. So based upon last year's stock prices, if he would have made this "token gesture" last year, his salary would have gone from $56,800,000 to $56,200,000. Give me a break, it's a PR move that doesn't even have a TRIVIAL impact upon his bottom line.
Posted by The Harper (41 comments )
Reply Link Flag
What an utter lie, propaganda & nonsense :(
The lies and propaganda that comes out of Big corporations, Big media, in US seems to have no end or limit.
Perhaps this story of Yahoo CEO getting paid $1 in salaries, and same for the "Google Boys" is the ultimate insult to our intelligence.
These guys each have made couple of $100s of Millions of dollars over the last few years from dumping their stocks, and are going to do the same over the coming years since unlike the "schmuck" public they get to receive their stock options at pennies or few dollars, so even if Google stock collapses to $5 per share, "Google Boys" can still make $100s of Millions of dollars since they got their share along with the rest of the silicon valley insiders at pennies per share.
Also they have $10's of Millions of dollars in non cash type compensation, from paid company care, to paid company private jets, to multi Million dollars loans that are interest free and secured by their stocks, etc. etc.

I mean which one of the Billions of people
worldwide which work for a salary would not LOVE to get $1 in salary for next year IF they too could sell couple of $100s of Millions of dollars in stocks, have paid private jets, etc.!!!

Yahoo & Google please give us a break with your propaganda & lies :(
Posted by Sea of Cortez (67 comments )
Reply Link Flag
You forgot Apple
"Yahoo & Google please give us a break with your propaganda & lies"


It is amazing how Apple is automatically exempt from all criticism! Not that your oversight was intentional, but Steve Jobs was one of the early adopters of the $1 pay strategy (as mentioned by the article).

Personally, I have no problem with it. You and I have the same right as Jobs, Semel, Schidt, etc., to start a company and get paid billions. Capitalism at its finest.
Posted by just_some_guy (231 comments )
Link Flag
What an utter lie, propaganda & nonsense :(
The lies and propaganda that comes out of Big corporations, Big media, in US seems to have no end or limit.
Perhaps this story of Yahoo CEO getting paid $1 in salaries, and same for the "Google Boys" is the ultimate insult to our intelligence.
These guys each have made couple of $100s of Millions of dollars over the last few years from dumping their stocks, and are going to do the same over the coming years since unlike the "schmuck" public they get to receive their stock options at pennies or few dollars, so even if Google stock collapses to $5 per share, "Google Boys" can still make $100s of Millions of dollars since they got their share along with the rest of the silicon valley insiders at pennies per share.
Also they have $10's of Millions of dollars in non cash type compensation, from paid company care, to paid company private jets, to multi Million dollars loans that are interest free and secured by their stocks, etc. etc.

I mean which one of the Billions of people
worldwide which work for a salary would not LOVE to get $1 in salary for next year IF they too could sell couple of $100s of Millions of dollars in stocks, have paid private jets, etc.!!!

Yahoo & Google please give us a break with your propaganda & lies :(
Posted by Sea of Cortez (67 comments )
Reply Link Flag
You forgot Apple
"Yahoo & Google please give us a break with your propaganda & lies"


It is amazing how Apple is automatically exempt from all criticism! Not that your oversight was intentional, but Steve Jobs was one of the early adopters of the $1 pay strategy (as mentioned by the article).

Personally, I have no problem with it. You and I have the same right as Jobs, Semel, Schidt, etc., to start a company and get paid billions. Capitalism at its finest.
Posted by just_some_guy (231 comments )
Link Flag
Eric Schmidt is the biggest Mafia puppet in the US. He is bad news for apple users. http://endmafia.com
Posted by geo11101 (76 comments )
Reply Link Flag
 

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