By on January 16, 2009

Yahoo CEO’s Salary: $1M if She Sucks, $19M if She Kicks Butt!

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Let me walk you through my two reactions to learning about the compensation package for newly appointed Yahoo CEO Carol Bartz.

First:

Your starting annual base salary will be at the rate of one million dollars ($1,000,000) per annum, less applicable taxes and withholdings…You will also be eligible to receive an annual target bonus of two hundred percent (200%) of your annual Base Salary…

My reaction? $1 million–maybe 2–to take over a company that is arguably in the sorriest state of its entire existence? I’d want at least $10 million on the table before I’d consider putting my good name alongside that mess.

Then I read:

Bartz, 60, could supplement her salary with a cash bonus up to $4 million, depending on Yahoo’s financial performance. She also is guaranteed a 2009 payment of $2.5 million in cash and $7.5 million in Yahoo stock…None of Bartz’s stock options will vest unless she can increase Yahoo’s stock price by at least 50 percent above the exercise price of her options.

All told, Bartz could earn a whopping $19 million, if she can come in and right the ship. This tells me two things.

  1. The Yahoo board is smart enough to offer a package that only really rewards if Bartz excels as CEO.
  2. Bartz is ultra confident that she can get Yahoo on track and its stock price back closer to $20.

Bartz may not be a big name–at least "not round these parts"–but clearly the signs are good that Yahoo’s not out for the count!


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26 comments on “Yahoo CEO’s Salary: $1M if She Sucks, $19M if She Kicks Butt!”

  1. Jack Says:

    January 16th, 2009 at 11:37 am

    At this point, what can Yahoo do to turn the ship around? In my opinion they have been beaten at every aspect of the game and it would take some real innovation not only in search, but all aspects of their company, or they will soon be just a footnote in the Wikipedia entry for Google.

    Jack’s last blog post..Relevancy in links not so relevant?

  2. Utah SEO Pro Says:

    January 16th, 2009 at 11:38 am

    That’s a win-win situation :) I think that’s very fair though.

    Utah SEO Pro’s last blog post..An Interview with Utah SEO Pro (Jordan Kasteler) by Martin Bowling

  3. Vygantas Says:

    January 16th, 2009 at 11:39 am

    I wanna be Yahoo CEO. Would fix it in like 30 days.

    I mean, everyone could do that. Just bit logic, some research and you can resurrect it.

    Vygantas’s last blog post..Browsers are Hot Again

  4. Dev Basu Says:

    January 16th, 2009 at 11:53 am

    I think it’s a pretty fair compensation package, but I wouldn’t have taken the deal for $1M at the low end. That said, I think that the board made the best choice in Yahoo’s interests.

    Dev Basu’s last blog post..Bad Link Requests: Get Your Targeting Right

  5. Lindy Norris Says:

    January 16th, 2009 at 11:58 am

    Finally a company with a board of directors who appears to be responsible on this decision. I can’t believe all the stories about CEO’s that will get paid Millions if they get FIRED. Umm ya let’s reward someone for actually doing good work here. Only time will tell if Yahoo can be saved.

  6. R&B Love Songs Says:

    January 16th, 2009 at 12:47 pm

    That sounds like a great strategy, so long as she doesn’t do anything to artificially inflate the stock price short term to ensure her compensation.

    Still, I think they’ve got the right idea.

  7. PS3 Says:

    January 16th, 2009 at 12:48 pm

    That would sound a lot of money if I hadn’t just heard that the footballer (soccer star!) Kaka is being signed for 90 million GBP and will get 500,000 GBP a week wages!

  8. Andrew Melchior Says:

    January 16th, 2009 at 1:02 pm

    It will be interesting to see what Bartz can do. I think she is going to have to make some pretty big changes and invent some great ideas to turn Yahoo back in the right direction, and it seems like she has some good incentive…19,000,000 good incentives, but what a task. Honestly, I wish her good luck and hopefully some fun helpful things come out of it for Yahoo users.

  9. Sheila Says:

    January 16th, 2009 at 2:12 pm

    ahem – you missed an opportunity to use the more descriptive version of sucks – psuks ;-)

    Sheila’s last blog post..Tips for Visiting Hawaii Volcanoes National Park

  10. Andy Beal Says:

    January 16th, 2009 at 2:54 pm

    @Sheila – Lolcat blog title FAIL! ;-)

  11. ian Says:

    January 16th, 2009 at 3:10 pm

    I was skeptical about her at first, but her record, attitude and now this performance-based package make me think that a smart outsider like her could make a BIG difference. Ballmer’s probably throwing things right now.

    ian’s last blog post..Microsoft AdCenter Finally Brings Us Custom Date Ranges

  12. DF Marketing SEO Says:

    January 16th, 2009 at 11:53 pm

    Wow, thats a nice incentive to perform! lol

  13. Jacques Seoman Says:

    January 17th, 2009 at 1:53 am

    Well this is good news for Yahoo, as a performance-based package like this means that she isn’t merely there as a board-buddy that could extract some more loot out of a company stuck in a downward spiral. Now let’s see her plans for Yahoo unfold!

  14. Jayson Says:

    January 17th, 2009 at 2:17 am

    I’ll take it for $0 and get a million if I win!

    I think that’s a fair deal, I’d be more interested in learning what she earned after the first round.

  15. Shirley Says:

    January 17th, 2009 at 8:58 am

    Yeh, that is low compensation if she’s bad… But who knows, she might just be what Yahoo needs. And she’ll definitely work harder for that bonus!

    Shirley’s last blog post..ALT vs. TITLE Attributes For Images in HTML

  16. Jason Kuiper Says:

    January 17th, 2009 at 12:47 pm

    That is more than a fair deal. You hold up your end of the bargain, and they will hold up theres!

  17. » Yahoo gets a new boss and more of this week’s search engine news (Jan 18) Says:

    January 18th, 2009 at 8:51 am

    [...] Yahoo CEO’s Salary: $1M if She Sucks, $19M if She Kicks Butt! [...]

  18. Xbox 360 Says:

    January 18th, 2009 at 9:41 am

    there’s an incentive to work harder if ever I saw one

  19. Goran Web Design Says:

    January 19th, 2009 at 2:29 am

    Good idea from YAhoo!’s side.. ensure they don’t just hire someone who’s along for an overpaid ride to the company’s financial decimation! And, one assumes, she’s confident she can help the company get back on it’s feet.. the next year or two should be interesting

  20. Brandon Says:

    January 19th, 2009 at 3:49 am

    Yeah I think yahoo is offering that bonus as an incentive for her to work harder to earn it. Good strategy by them. But 1M is still good money IMHO lol

    Brandon’s last blog post..Monetizing A Website To Earn An Income

  21. Frank Reed Says:

    January 19th, 2009 at 8:06 am

    Oh no! This reeks of responsible corporate activity. We can’t have that. It’ll cut down on the news stream to complain about how Yahoo! is wasting their (stockholder’s) money.

    I actually have to start rooting for these guys since there is apparently some common sense and fiscal conservatism on the board (at least outwardly).

    @Andy, I’m not so sure that she is confident she can turn it around. Maybe the base and cash payout is actually reasonable to her and other “step up” clauses (varying degrees of success rewarded as well as the final goal) exist that we are not privy to. Who knows. I’m just happy to see that someone took the job!

    Frank Reed’s last blog post..Typical Twitter Types to Tolerate and Twollow

  22. Nick Stamoulis Says:

    January 19th, 2009 at 9:04 am

    It is crazy that one of the most trafficked websites in the world is such a mess they cannot see a light at the end of the tunnel. It sounds like they really need to take things in a new direction.

  23. Friendster Layouts Says:

    January 19th, 2009 at 9:25 am

    Wow! That is a very huge amount. I wish I could also earn that much some time in the future.

  24. Kenney and Kim Says:

    January 20th, 2009 at 2:58 am

    I love it. I think more companies and almost all publicly traded companies should go to a performanced based salary. Get the job done get paid. I mean your not gonna starve on a $1 million salary, so she’ll be alright. But the upside is awesome.

    Maybe Yahoo will set the trend for this new type of CEO salary offerings. Especially in a economy like this one.

  25. Srv Says:

    January 21st, 2009 at 10:11 am

    I see this perfectly placed. For the best interest of everyone, we need Yahoo to stood up and give some fight to Google.

    I hope Yahoo will come up strong.

  26. water Tanks Says:

    February 15th, 2009 at 9:52 pm

    I think this is the way most ceo should be paid.
    Alot of seo are overpaid for constant paid performances and then when they get rid of them, they give them a nice multi million dollar golden hand shake…

    Thanks for the article