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Yahoo CEO gets new salary of $1 a year through 2008

June 3rd, 2006

Yahoo CEO gets new salary of $1 a year through 2008

Yahoo! website

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.

 
 
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Nicole Wilson
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