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Former Yahoo CEO Carol Bartz
According to Yahoo, Bartz was fired "without cause," which gives her a healthy severance that consists of both cash and millions of dollars attached to Yahoo's stock performance within the next year

Earlier this week, former Yahoo CEO Carol Bartz announced that Yahoo’s Chairman of the Board fired her over the phone. This action didn't seem entirely too shocking to many, as Bartz made enemies on Wall Street while serving as Yahoo's CEO.  

Bartz was relieved of her duties with 16 months left of the four-year contract that she signed back in January 2009. She released an email to Yahoo employees this week informing them of what had happened and that she wishes "only the best going forward." 

Now, Bartz is moving forward herself -- with a 
hefty severance package that will leave her with millions of dollars.

According to Yahoo, Bartz was fired "without cause," which gives her a healthy severance that consists of both cash and millions of dollars attached to Yahoo's stock performance within the next year. 

As far as the cash goes, Bartz's contract gives her $3 million, plus a pro-rated 2011 bonus of $1 million to $2 million.

The stock is where the real money comes in, though. In Yahoo's latest regulatory filing on executive compensation, the company estimated that Bartz would have collected $5.2 million in stock payouts if she were fired December 31, 2010. Both cash and stock would have added up to $10.4 million if she were 
terminated on or before the final day of the company's latest fiscal year.

But Yahoo hasn't updated its filings yet to show how much she'll collect for her actual termination date. It's looking good for Bartz though, since she has a series of stock grants that cash out immediately upon termination, and also received a complex stock option package when she first signed on that gives her up to $5 million shares at a "strike price" of $11.73 (Yahoo's closing price January 30, 2009). 

Bartz could collect a majority of those shares based on the length of her service, but they'll only vest if 
Yahoo's stock hits between $17.60 and $35.19. The deciding day will come in December 2012, and is Yahoo's share price is trading "in the money" at that point in time, Bartz will receive her payoff. 

Timothy Morse has been chosen by the Yahoo Board of Directors as the interim Chief Executive Officer to replace Bartz.



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Drop in the bucket..
By nocturne_81 on 9/8/2011 9:43:13 AM , Rating: 5
A few million.. that's it?

I know, ridiculous on it's own merit... do a horrible job, and then get paid to leave, but..

This is nothing compared to the norm.. Carly Fiorina raked in $21 million when forced to leave HP after she practically burned the place to the ground. But, that's nothing...

Robert Nardelli of Home Depot, $240 million
Michael Ovitz of Disney, $140 million
Stephen Hilbert of Conseco, $72 million
Mark Hurd, again from HP, $34.5 million (estimated)
Robert Kelley of BNY Mellon, $33.8 million
Cleve Killingsworth (ironically named) of BCBSMA, $11 million

Though, these are all given out based on the terms of their contracts.. The concept is, if you offer a CEO so much money if they fail miserable, then they will be willing to take necessary risks. Worse yet is the fact that these guys have no problem at all getting employed elsewhere..




RE: Drop in the bucket..
By MrBlastman on 9/8/2011 9:57:57 AM , Rating: 5
I have zero sympathy for Carol. She earned over 45 MILLION her first year at Yahoo. That's right. Forty Five million dollars in cash and stock.

Nobody, I repeat, _nobody_ deserves to earn that kind of money working for a company unless they founded the company with their own dollars and sweat. If they did, they can make as much as they darn well please. Carol was hired and that is all. She also was working for Yahoo, a company that was struggling. That hardly merits such an absurd pay package.

Her whole "boo hoo, look at me" email she sent to staff pointing out that she was fired over the phone--what a bunch of pitiful crap. She should stuff it up her backside. Her smug little "sent from my i-pad" was icing on the cake as to how sad it was.


RE: Drop in the bucket..
By Dr of crap on 9/8/2011 10:22:04 AM , Rating: 2
Uh, her salary was 1 million.
If you read the link -

"piled up tens of millions more in stock grants and cash bonuses at a whopping $47.2 million -- though most of that is a paper gain based on stock options that may not ever pay out"

So don't be TOO outraged.
Although I could live, and live well, with $200,000 a year!


RE: Drop in the bucket..
By MrBlastman on 9/8/2011 11:06:20 AM , Rating: 2
I'll break it down for you:

Salary: 970k
Bonus: 1.5 million

Stock: 13 million
Other Comp: 32 million

May or may not pay out doesn't matter. It's excessively absurd, period. I could live great on only 100k/year (and that's with a wife and child). There's a lot of stuff in this world we don't actually need.


RE: Drop in the bucket..
By EricMartello on 9/8/2011 11:15:40 AM , Rating: 1
Although I am all for capitalism...mostly...I agree with you on that point. A hired employee, regardless of their position, should have a maximum limit to how much they earn directly in salary and indirectly in comps and bonuses. Any bonuses should be directly tied to their job performance, and such bonuses should be available to all employees who contribute to the company. It's no coincidence that most of the companies that overpay their CEOs are also struggling to get by.


RE: Drop in the bucket..
By MrBlastman on 9/8/2011 11:26:15 AM , Rating: 3
quote:
It's no coincidence that most of the companies that overpay their CEOs are also struggling to get by.


It's funny that you mention that--I actually use executive pay as a benchmark as to whether a company is worth my time or not. If it is far too high in relation to revenues or revenues to employee output, I move on. It is amazing how many companies barely make it are full of bilkers at the top.

However, as I mentioned, if they founded the company, who cares what they make. Larry Ellison made 700 million in one year. It's his kitty though, so he earned it (even if he has no eyebrows). :)


RE: Drop in the bucket..
By Iaiken on 9/8/2011 1:13:52 PM , Rating: 2
My employer has a market capitalization of $10 billion and our President/CEO makes only $600,000 in total compensation per year (including stock/options). Personally, I admire the fact that he makes a pittance compared to the CEO's of numerous like-sized companies especially when you factor our performance vs theirs.

Company profits have been around $1.29 per share each quarter so far this year and dividends are sized at 60% of share-profit ($1.11 last quarter), paid out quarterly. Of the remaining 40%, 10% is set aside for bonuses to employees at fiscal year end and 30% is set aside for acquisitions or emergencies. My annual dividend yield on company stock has been an average of 12-24% (more lately as the stock price has tanked 22% as the market dragged us down). So I would say that our CEO has earned his keep.

Meanwhile the CEO's of similar sized companies are raking in massive cash (in the area of $3 million per year) despite poor performance. CEO pay has steadily gone from absurd, to whole-sale debauchery. I applaud the CEO of Aflac Incorporated for being the first CEO to have the balls to put executive compensation in the hands of the shareholders. Personally, I'd like to see binding pay approval votes become mandatory, these board-CEO-pay-raise circle jerks have got to stop.


RE: Drop in the bucket..
By Schrag4 on 9/8/2011 1:05:44 PM , Rating: 3
quote:
A hired employee, regardless of their position, should have a maximum limit to how much they earn directly in salary and indirectly in comps and bonuses.


What would you set the "maximum limit" for salary and comps to for a "hired employee?"

This oughtta be good. *grabs popcorn*


RE: Drop in the bucket..
By MrBlastman on 9/8/2011 1:12:47 PM , Rating: 2
If I had to come up with a maximum limit, it would not be a hard number, but instead a function based on both the prosperity, revenues and ratio of revenue to employees, factored with a correlation to tertiary benefits such as medical plan etc., and potential stock options.

In other words, it would be relative to the company and its performance with extreme consideration in correlating it with workforce within. It'd have to be this way to keep it in check and prevent any future disparity due to inflation and other factors.


RE: Drop in the bucket..
By Schrag4 on 9/8/2011 1:28:00 PM , Rating: 2
Ok your formula sounds great. Do you think a company would merely be better off by considering that formula? Or do you think every company should be forced to adhere to it?

In other words, what do you (and others) mean by "would" or "should?" Do you mean "would by law" or "there should be a law"? I don't care what your formula is or what someone else's fixed limit it. I think it's wrong in either case to limit how much a company (or an individual for that matter) can pay their employees. If you have the means to pay it, why does anyone else care?


RE: Drop in the bucket..
By MrBlastman on 9/8/2011 1:50:51 PM , Rating: 2
Well, see, this is where it gets tricky. Now we're talking philosophy rather than policy.

See, our Constitution has no provision in it to grant the Government (correct me if I'm wrong) the ability to limit compensation within Corporations. I'm in no way in favor of amending our document to allow this. That would go against our national spirit of Capitalism.

I think that our Nation as a whole would be better off if companies would consider this as it would lead employers to pay their employees more in order to up Executive compensation--much like ERISA ADP/ACP testing of 401k plans which prevent executives from contributing excessively if their employees are contributing very little (Safe Harbor can mitigate this but the company has to give more to override these tests). It would prevent these ridiculous payouts when there is a great disparity between Executive comp. and line employee pay.

So, it'd have to be philosophy rather than a policy. As we all know, philosophies take time. While they take their time to bear fruit, there will always be others calling those who adopt it, "schmucks." Only time would truly tell if it has a positive impact on productivity and the workforce.


RE: Drop in the bucket..
By EricMartello on 9/9/2011 1:08:11 AM , Rating: 2
quote:
What would you set the "maximum limit" for salary and comps to for a "hired employee?"

This oughtta be good. *grabs popcorn*


I would set it inline with what other employees are being paid and I would make the compensation model universal so that all employees have the same opportunities. For example, the compensation scale from the lowliest entry-level data-entry guy up to some department supervisor probably has a relatively smooth gradient from lower to higher. It makes little sense that the compensation scale would suddenly skyrocket to 10-20 times after passing the supervisor's pay level. As for bonuses, all pay levels should have some kind of incentive available to them, not only top-level positions.

I am a fan of performance-based compensation. Since I am an entrepreneur myself, all of my income depends on my action or lack thereof. If I do nothing I get nothing. If I make bad calls, I lose money...but if I make intelligent decisions I am rewarded with improved income. I have found that people who are willing to be compensated based on their performance do a much better job than those who expect a base salary/benefits/bonus.

If the only thing motivating a person to work is the threat of losing their job, they're not going to perform so great. If they know they'll get paid substantially more for doing better they will do a better job. Of course, measuring and quantifying performance can be a challenge in some situations but I would not want any "placeholder" employees in my ranks. Everyone there should have a clearly defined job that needs to be done, and done well.


RE: Drop in the bucket..
By alcalde on 9/9/2011 11:01:37 PM , Rating: 2
You're right; if she invests the severance package adequately she could live nicely from the interest without ever having to work again in her life.


RE: Drop in the bucket..
By wempa on 9/8/2011 1:26:57 PM , Rating: 4
What's even more outrageous is that CEOs are truly hit-or-miss. They are really just making big guesses as to what is going to work for the company. Based upon the CEO performance stats, a company has about the same odds of success by just randomly picking somebody from their industry. Yet, these CEOs get showered with massive compensation and golden parachute packages. They can work for a few years and be set for life regardless of whether or not they actually did anything beneficial for the company. It makes you wonder why these company boards keep throwing so much money at these CEOs.


RE: Drop in the bucket..
By invidious on 9/8/2011 1:44:13 PM , Rating: 3
I don't understand why people have unlimitted sympathy for ignorant investors but no sympathy for the people who just lost their job. Sure the CEO makes more money than you and it is easy to demonize them when the company does poorly. But obviously her services as CEO were considered to be worthly of this compensation at the time since they gave her this contract. Just because they change their mind now doesn't get them out of the contract they signed.

I am sure there are people sufficiently poor who think you and I are overpaid. Should we therefor be stripped of our benefits because of the opinions of those people?

What do you even care how much she makes? Unless your a stockholder its not your money. Personally I dont care what happens to yahoo. If they wnat to make stupid business decisions and overpay their CEO more power to them. I dont use their dated services either way.


RE: Drop in the bucket..
By Zuul on 9/8/2011 10:41:55 AM , Rating: 2
Executive severance packages are often construed by people as payment for a piss poor job. It's easy to see it that way however, I view it as more of a legally binding bribe as you'll find at management levels and above, severance packages are usually very large (6 months salary and above).

The point of large severance packages is piece of paper that goes with it that says by accepting the package, the executive shall not pursue any legal action against the company. Such legal action in itself could be very damaging to the company since it may require divulging sensitive information.


RE: Drop in the bucket..
By nocturne_81 on 9/8/2011 11:04:04 AM , Rating: 4
I just think the wage gap is ridiculous, and getting much worse...

Exactly how much money do you have to make before money doesn't matter anymore..? I'm sure I could waste a few million pretty easily, but in financial markets you have executives making hundreds of millions of dollars (I'd hate to be 'that guy', but yes -- after we bailed them out).

I manage with my limited income, and am certainly happy enough... but the thought that so few make so much, while so many of us can barely survive (not to mention that one in five children in the US suffer from malnutrition).. the term 'social injustice' comes to mind. Exactly when will people realize that enough is enough. When are things going to stop getting worse, and start getting better..?

If you're not angry yet.. keep in mind that if you spent a single penny last year and had to pay any tax on it -- you already paid more taxes than General Electric; one of the largest, most profitable, and incredibly prolific 'american' companies..


RE: Drop in the bucket..
By Pirks on 9/8/2011 1:05:33 PM , Rating: 1
quote:
the term 'social injustice' comes to mind. Exactly when will people realize that enough is enough
Well, a long time ago the people of Soviet Union, North Korea, Cuba and a few other countries decided that private property leads to social injustice, hence it is bad and must be banned, and everybody should get the same salary from the state, plus minus 50% or so. Look what happened to these countries. Does it teach you any lessons, my friend?


RE: Drop in the bucket..
By sviola on 9/8/2011 4:05:49 PM , Rating: 2
These examples you chose are of non-capitalist nations. There are capitalist nations were the differences in earnings are not as huge as the US. Nordic countries are examples where there are not much disparity between wages (a friend of mine that went to Sweden and told me he met the president of a car manufacturer and learned that he only made 4 times more than the least paid in the company).


RE: Drop in the bucket..
By alcalde on 9/9/2011 11:06:47 PM , Rating: 2
Aren't the 1950s over? Are we still accusing everyone to the left of Goldwater of being Soviet sympathizers? Please make your arguments based on fact and not emotion or creating strawmen. Now we just need a Hitler reference....


RE: Drop in the bucket..
By nikon133 on 9/8/2011 5:29:37 PM , Rating: 2
That might be one of reasons why US economy is where it is.

They should deal with epic-fail CEOs the Asian way; send them a ninja, instead of making them filthy rich...


By inperfectdarkness on 9/9/2011 11:04:09 PM , Rating: 2
Q: what's the difference between buying american and buying japanese?

A: where the CEO lives & how much he makes

seriously:

http://www.japantoday.com/category/commentary/view...

"The authors of this study had the advantage that they could still review the old Tax Office lists, and so were able to draw up a topology of what executives at various companies were making, then do a simple comparison with U.S. published figures. In essence, they conclude that Japanese executives are paid 9-10 times LESS than their U.S. colleagues, and that even the highest paid executive in Japan in 2004, Tadashi Yanai of Fast Retailing, took home $30 million, compared to the top U.S. CEO, Reuben Mark of Colgate-Palmolive, who took home $147.9 million (much of it in options). Needless to say, Yanai is also founder of his company, so he would have been able to make much more than this if he felt like it."

one more reason why the USA is headed down the crapper.


By inperfectdarkness on 9/9/2011 10:59:21 PM , Rating: 2
that's just nardelli's severence. in the 5.5 years he was at home depot, his total paycheck (signing, severance, and annual salary) was $500,000,000.

a untrained monkey could have done a better job.


I don't see what the big deal is.
By Schrag4 on 9/8/2011 1:01:48 PM , Rating: 2
If Yahoo didn't want to pay her millions in severance then they wouldn't have offered it in her contract. Is it ridiculous to reward a job done poorly? Of course! But that's what they agreed to. If someone wants to try to articulate how it's "wrong" for Yahoo to promise severance and then follow through on that promise, I'm all ears.




By senbassador on 9/8/2011 7:31:52 PM , Rating: 2
I don't think she was that bad of a CEO to begin with. Yahoo was kind of on the decline before she became CEO to begin with, and she just failed to turn it around. If anything, she was probably a halfway decent, mediocre CEO who oversold herself, and they were counting on her being the next Steve Jobs. I guess she was just smart enough to negotiate the sweet severance payout in case things didn't work out.


Wha?
By Iaiken on 9/8/2011 9:41:41 AM , Rating: 3
quote:
plus a pro-rated 2011 bonus of $1 million to $2 million additionally.


Severance fine, but a bonus? What a joke!




Put Yang back into the office
By chick0n on 9/8/2011 10:43:16 AM , Rating: 3
honestly, when they first fired Yang I was like Yahoo,Oh No.

Many people blame Yang, said that he should've just sold the company to MSFT when he had the chance, but at that time, I think he(and a few other FOUNDERS of the company) was the only person who really loves Yahoo and don't want to sell it, even so They want to sell it for a really good price.

These shareholders/board are so smart and they hired that jackass to replace Yang.

then they fired him again and hired this lousy bitxh.

when I first saw this bitxh I was like "holy crap, this is getting worst", I was right, this woman(or should I say, any womEn) has failed once again. fired people who point her errors out, replace them with her talk "buddies" so she can stay in her positon for longer, then just chat/bs/tea everyday until they fired her. Hell, I can do a better job than this useless bitxh.




Thanks capitalism...
By evo slevven on 9/8/2011 12:23:14 PM , Rating: 2
I'm getting annoyed with the consistent phrase that "higher executive pay is tied with the greater weight of their decisions and current reach of globalism". Frankly doing a poor performance for millions and then heading to another company where you might equally be a poor performer is getting to be an irritating trend.

Yang might have been booted because of his failures dealing with Microsoft. Having said that, its not like they've exactly one~upped him either and expanded the business.




well
By senbassador on 9/8/2011 4:11:46 PM , Rating: 2
I don't get what the deal is. If the investment class, board members are dumb enough to get taken by a smooth-talker with a shiny MBA, then they deserve to get taken. Good for Carol for exploiting their dumbness. Also, to be fair, yahoo was in poor shape even before Carol got on board.

I mean come on, what exactly does yahoo have to offer to consumers circa 2011. Seriously, go to yahoo.com and what do you see. A "news portal" similar to msn.com. Are they trying to be "content providers" or a tech company? Pick one. The "web portal" as a service is an anachronism back to the days of AOL. The only thing yahoo has going for them is a pretty decent chat/video service, and thats about it. Don't blame the CEO for yahoo's poor performance. Blame the fact that yahoo hasn't done anything innovative in over 10 years.




Looks like she gets NOTHING....
By kitonne on 9/9/2011 8:22:30 AM , Rating: 2
Her contract had a non-disparagement clause, and she vented a little too much in interviews after being fired - see:

http://www.theregister.co.uk/2011/09/09/carol_bart...




By DatabaseMX on 9/9/2011 4:32:35 PM , Rating: 2
... she $ingle! Appears to be based on that photo!




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