Yahoo! CEO Being Paid Too Much?
Permalink |As the WSJ reports today in an article entitled Some Yahoo Investors Withhold Votes, some large shareholders withheld their votes for Yahoo!’s compensation-committee members:
…after corporate-governance firm Institutional Shareholder Services raised concerns about Chief Executive Terry Semel’s pay. At the annual shareholder meeting Thursday, holders withheld 16.7% of votes for Robert Kotick, 16.8% for Gary Wilson and 18.4% for Arthur Kern, the three board members who make up the compensation committee.
Part of Mr. Semel’s pay package amounts to:
…Mr. Semel received a bonus option to purchase 1.8 million Yahoo shares and an annual-review option to buy four million shares in March 2004, followed by a fully vested option to purchase 1.2 million shares, among other awards.
May 23rd, 2005 at 12:16 pm
Geez, granted the guy makes a bundle and it’s difficult to believe anyone’s worth several hundred million in overall compensation, but look at what he’s done for Yahoo! since the bust. After experiencing Y! at $4/share and struggling to hit $1B in revenue, seeing it at $36 and hitting $4B in revenue sounds pretty good to me. And acquisitions under his reign (look at Overture and Launch, which are doing quite nicely, thank you) are a bit better than days or yore. Hmmm…let’s not buy eBay and spend buckets of money on Broadcast.com and Geocities instead (let’s roll our eyes together now!). Granted, I’d like more of that stock option love flowing my way, but if it wasn’t for a strong management staff, it wouldn’t matter anyway - they’d be worthless.
May 23rd, 2005 at 4:59 pm
I’ll give Yahoo! much credit for purchasing Overature and Inktomi (and Flickr).
However, I won’t give Terry’s team complete credit for their current success. Success that is being driven by macro issues. That is, ad dollars are rapidly moving to the web. Yahoo!’s current success is mostly a case of being in the right place at the right time — just like eBay was/is. For that, you can thank the people that bought Broadcast.com and Geocities.
And regarding these less than steller acqusitions, one needs to remember that acqusitions are like movies. LOTS of duds, but one big hit to save the day. In addition, both the Broadcast and Geocities acquisitions were being driven by a lot of dynamics at the time, such as the need to scale rapidly. During this time Yahoo! was not the clear leader and was locked in a horse race with AOL, Excite, Infoseek and to some extent AltaVista. It’s easy in hindsight to look back at these two acquisitions and say they were duds, but they did contribute to Yahoo! becoming the clear leader in its class.
Oh, and a bigger criticism of Yahoo! would be its creation of the leader in its own market. Taking short term dollars to distribute Google (through Yahoo! search) was clearly a mistake. Yahoo! should have realized that search is a core competency.
May 26th, 2005 at 7:25 am
Points well taken. Though in the pile of duds, one would hope that it doesn’t contain the two most expensive acquisitions in the company’s history. Yes, that was inflated boom pricing, but still - $5 billion?! Ouch. What I do give Semel credit for is understanding that Y! needed a whole lot more focus and consolidating the 40+ properties into somewhat cohesive business units. I also give him (and his mgmt team) credit for recognizing the importance of search in Overture acquisition, the dropping of the Google engine, and the appointment of Terry’s #1 lieutenant to head up the search team. I’m really interested in seeing where the latest move to “Hollywoodize” the media team with the hiring on Braun and others and the move to LA will take the company.