Discuss competitive strategy decisions

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Reference no: EM131698897

Yahoo! stock was battered for several years, leading up to the crisis-laden replacement of CEO and co-founder Jerry Yang with Carol Bartz. Several poor competitive strategy decisions, compounded by Yang's spurning overtures and offers to buy Yahoo! from Microsoft, led Yahoo!'s board to "encourage" Yang to finally step down in early 2009 to be replaced by Bartz, Autodesk CEO at the time. Her compensation package upon taking the helm at Yahoo! was intended to focus her efforts on rebuilding the Yahoo! stock price. The seven elements of her initial Yahoo! compensation package were:

1. Annual base salary of $1,000,000.

2. Annual bonus with a target of 200% of base salary and a maximum of two times the target, to be determined by the Compensation Committee of the Board of Directors of Yahoo!

3. Stock options for 5,000,000 shares at the price on February 1, 2009.

4. Annual equity grants as generally made to senior executives, including a grant valued at $8 million in February 2009.

5. Health, life, disability insurance, an employee stock purchase plan, a 401k plan, and four weeks vacation per year.

6. $150,000 in advisory fees related to this agreement.

7. An equity grant valued at $10,000,000 to compensate Bartz for forfeiture of the value of equity grants and medical coverage with her previous employer, Autodesk.

What is your evaluation of this "deal?" Does it seem fair and appropriate to Bartz, Yahoo!, and its stockholders? If you want to see what other people thought about this arrangement, you can view comments from a wide variety of people

Take on the role of one of Yahoo!'s stockholders. What is your evaluation of this very attractive offer from the company to Ms. Bartz? Is this very favorable package fair to Ms. Bartz, the company, and stockholders? Why/why not?

Reference no: EM131698897

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