Why Did Terry Semel Get $107.5 Million?
Yahoo’s pay compensation committee has been showering Semel with money, giving him
at least anywhere from $1.08 billion to over $800 million in stock grants over the last six years. Last year, $107.5 million in stock grants was given to Semel in lieu of a $1 salary, a year in which Yahoo stock dropped about 35%. That means he was paid $107.5 million for erasing over $15 billion in shareholder value!
Why is he getting so much money? Google’s founders don’t receive any extra stock, and they are paid $1, so they are working purely to make the company more valuable. Meanwhile, Yahoo’s boss doesn’t have any incentive to make the company more valuable, because he gets paid $100 million a year no matter how bad a job he does. Why does he still have a job? Wouldn’t Yahoo gain so much with a lower-paid CEO that the firing of Semel alone would improve their earnings?
UPDATE: Yahoo shareholders voted significantly against the current slate of directors at the annual meeting, but not enough to get them removed. Hopefully it will send a message that enormous compensation without results is not acceptable.