September 08, 2011

Fired Yahoo! CEO Received $40 Million in 2009

According to Business Week:

Oct. 11 (Bloomberg) -- Yahoo! Inc. Chief Executive Officer Carol Bartz topped a list of executives who are paid too much for running underperforming companies, according to a report by proxy advisory firm Glass Lewis & Co.

Bartz, who joined the company in early 2009, received $39 million last year, according to Glass Lewis, which is based in San Francisco. That was the highest compensation among executives at 25 overpaying companies in the Standard & Poor’s 500 Index, Glass Lewis said today.

To determine whether the company is paying too much, Glass Lewis weighs metrics including stock price, operating cash flow and growth in per-share earnings. Much of Bartz’s compensation included options to purchase stock at prearranged prices in the event the company meets certain targets. The executive aims to combat rising competition from Facebook Inc. and Google Inc. and reverse the slump that’s left sales little changed on her watch.

“Bartz represents a problem we find at many other firms with poor pay-for-performance grades: excessive compensation awarded to executives to encourage them to join or remain with a company,” the report said.

The demeanor presented by the CEO in this interview suggests that that money was likely ill-spent.

Here's a proposal to the Yahoo! board (whom the outgoing CEO labels "doofuses"): I think I could do a better job at 1/10th the compensation.  Indeed, I suggest that anyone you hire be limited to 1/10th the compensation, period--perhaps $1 million in salary, and up to $3 million in performance pay.

Posted by Anupam Chander on September 8, 2011 at 11:23 AM in Digitization | Permalink