Yahoo CEO gets new
salary of $1 a year through 2008
June 3rd, 2006
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Yahoo! website |
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Terry Semel, CEO
and Chairman of Yahoo took a big pay cut. The last three years his
salary was $600,000. The next three years he will make $1 each year.
He will be able to increase his income by future compensations, stock
options and grants. By doing this his incentive will be to increase
performance to increase his income.
This is not the
first company to pay their CEO a $1 salary. Larry Page and Sergey Brin
who are the co-founders of Google have a $1 salary. Also CEO Eric
Schmidt from Google has a $1 salary. They all gain compensation through
stock options and grants.
Semel’s optional
bonus would be in the form of stock options of up to 1 million shares
per year. Compensation Depends on the performance of Yahoo and will
determine the amount the board will approve for his bonus each year.
Semel is being
given an incentive to stay with Yahoo. The board has approved a stock
option of 6 million shares of Yahoo’s common stock at $31.59 per share.
The longer he
stays with the company the more his stock option increases over the next
three years. The first year is 25 percent, then 35 percent, and then 40
percent.
According to
Reuters report, Semel sold options for 7 million shares in 2005 which
after deducting the original purchase price he made $173.6 million.
Nicole Wilson
Best Syndication
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