Carol Bartz, CEO of Yahoo! appeared on CNBC's Squawk Box this morning talking about their search deal with Microsoft, that she would've taken the MSFT buyout offer at $33 or $34 ("you think I'm stupid?"), their investment in Alibaba, and the analysis I did last week which showed she sold $2mm in stock between Feb. 1 and June 30th this year.
Carol's response (at the very end of the video below) to Joe Kernan's question of "You're going to be there a while, I guess, huh? If you sell for tax reasons that doesn't mean anything, right?" was: "I didn't sell anything.... I bought this...." Joe's follow-up was: "You reacquired it, right?" Carol said: "Yeah." And, later, she said: "I'm around a long time." [Her comp plan says she'll be around for 4 years, by the way.]
What's the upside for any big media journalist (at CNBC or elsewhere) to pull a Mike Wallace and aggressively question Bartz? The risk is that you will lose access to her in the future. Therefore, I understand why big media takes a friendly approach. Nevertheless, Bartz -- and other CEOs -- deserve to be asked legitimate (even if they are uncomfortable) questions and they should be forced to answer them -- not laugh them off.
She didn't sell anything?
This is the SEC filing, dated March 31st, where she states she disposed of 65,323 YHOO shares at $12.81 for a total of $836,787.63.
This is the SEC filing, dated June 30th, where she states she disposed of 73,131 YHOO shares at $15.66 for a total of $1,145,231.46.
- YHOO has used its shareholders to "gross up" Carol's first-year bonus or signing bonus so that it's very likely she'll clear $5mm for the first year on the job (not including other comp she'll get).
- It's not clear exactly what she owed to the IRS when these shares vested. She should clarify.
- It's not clear why she cashed out 41% of her vested shares in Q1 but 46% in Q2. Did her tax bill increase in that next quarter?
- She shouldn't obfuscate the issue by saying she reacquired shares without a full explanation. I suspect she doesn't want to give a full explanation because she'd have to talk more fully about just how much money she's making in year one on the job.
- The broader conclusion here is that Bartz, other YHOO insiders, and insiders in general (not just at YHOO) have learned how to negotiate so that the vast majority of their generous compensation is guaranteed -- no matter what the performance of the company is.
She should have been smarter and agreed to make her boatloads of cash down the road, after first making lots more money for shareholders.
Sphere: Related Content