Yahoo Reduces Severance Plan “Poison Pill”
Just a day after their massive layoffs began, Yahoo’s in the news again—and again, it’s not really the kind of story you want about your company. This time, Yahoo has reduced their severance stipulation for a merger or takeover, removing a possible barrier to acquisition.
According to the AP, the new plan will make it significantly more difficult for any employees laid off after a merger to receive the generous severance packages that were guaranteed to all of its then-14,000 employees while Microsoft was vying for the company:
Yahoo agreed to revisions that will make it more difficult for employees to qualify for severance pay after a takeover. The changes also limit the eligibility period to the first year following a sale and allows the board to scrap the plan entirely—an option that wasn’t available under the original terms.
The revisions also specify the severance packages won’t be available if Yahoo decides to sell its search operations to Microsoft. That’s a deal several major shareholders, including board member Carl Icahn, are trying to make happen.
The changes come as an attempt to settle a shareholder lawsuit (this one?) alleging that the severance plan was a “poison pill” specifically calculated to prevent a Microsoft buyout—a claim Carl Icahn bandied about liberally at the beginning of June.
The changes take effect immediately. However, if a settlement in the lawsuit against Yahoo isn’t approved in the next 90 days, the changes to the severance plan automatically revert.
Naturally, Yahoo maintains that the changes aren’t an effort to attract a buyer for some or all of the company, and Microsoft maintains that they’re no longer interested. But what do you think—will this pave the way for a new deal?