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March 27, 2008 4:17 PM
Why Ballmer can't get anyone for Yahoo board: The pay stinks
Posted by Brier Dudley
Some think it's hogwash and Microsoft's about to close the Yahoo deal amicably, but the New York Post is reporting whispers on Wall Street that Ballmer & Co. is having trouble finding friendly faces to stuff onto Yahoo's board.
Maybe it's because Yahoo board compensation has been awful lately.
Yahoo compensates board members with stock options, many of which are underwater. At least that's how I'm reading the company's last proxy, in April 2007.
The filing is a little old -- reporting 2006 data -- but it suggests there isn't much upside to Yahoo board duty.
Maybe Microsoft has earned enough sympathy on the current board -- when its bid pulled YHOO up to the high $20s, some of the directors' recent grants went back in the money. YHOO closed at $28.09 today.
Footnotes from Yahoo's last proxy, with exercise prices in bold:
Each non-employee director listed in the table above was granted a stock option to purchase 15,000 shares on May 25, 2006 under the Directors' Plan with an exercise price of $32.92, which had a grant date fair value of $158,513. The outstanding option awards held by each director at 2006 fiscal year-end: Mr. Bostock (236,195), Mr. Burkle (415,000), Mr. Joshi (115,000), Mr. Kern (755,885), Mr. Kotick (235,626), Mr. Kozel (271,233), Mr. Wilson (328,200) and Mr. Hippeau (842,599, which includes an option to purchase 200,714 shares granted by SOFTBANK).
Board members are also in the habit of taking stock options instead of fees. Excerpts from more footnotes:
In lieu of cash, Mr. Hippeau elected to receive payment of his chair fees for the third and fourth quarters of 2006 in the form of options to purchase the Company's common stock. Accordingly, Mr. Hippeau was granted an option to purchase 445 shares on September 29, 2006 with an exercise price of $25.28, which had a grant date fair value of $3,790, and an option to purchase 440 shares on December 29, 2006 with an exercise price of $25.54, which had a grant date fair value of $3,608.In lieu of cash, Mr. Kern elected to receive payment of his chair fees for the third and fourth quarters of 2006 in the form of options to purchase the Company's common stock. Accordingly, Mr. Kern was granted an option to purchase 445 shares on September 29, 2006 with an exercise price of $25.28, which had a grant date fair value of $3,790, and an option to purchase 440 shares on December 29, 2006 with an exercise price of $25.54, which had a grant date fair value of $3,608.
In lieu of cash, Mr. Kotick elected to receive payment of his chair fees for the third and fourth quarters of 2006 in the form of options to purchase the Company's common stock. Accordingly, Mr. Kotick was granted an option to purchase 445 shares on September 29, 2006 with an exercise price of $25.28, which had a grant date fair value of $3,790, and an option to purchase 440 shares on December 29, 2006 with an exercise price of $25.54, which had a grant date fair value of $3,608.
But of course, there's more at stake here than money.
Posted by Anthony Stevens
8:59 PM, Mar 27, 2008
Surely someone with board qualifications believes the deal will be a financial win for YHOO shareholders? Plus, if you're already underwater, why not play ball, get a new chunk of options, and get a huge upside if it works? Board work isn't *that* time-consuming.
Posted by Olsonbw
8:38 AM, Mar 28, 2008
It's time for Ballmer to step down and stop flailing around trying to distract people from Microsoft's many problems. The cracks in the walls are obvious and growing bigger.
Yahoo is not going to help Microsoft at all. Anyone at Yahoo that knows how to fix Microsoft will not be allowed to turn the confused captain at Microsoft to see the light. Since he won't, the people at Yahoo that know how to do things will leave and go work somewhere else.
Which leads me to wonder. Did they have a reason as to why they didn't work at Microsoft from the beginning? I'm referring to the Yahoo employees and why they work at Yahoo and not Microsoft.
Ballmer needs to leave. Microsoft needs a true leader and visionary to take control of the company. One that doesn't need vocal surgery after screaming "developer" multiple times.
Bill Gates should not take back control. He only blatantly copies other companies products and is NOT a visionary. For instance, he didn't "get" the internet until everyone else did. How's that for being a "visionary"?
The lack of a TRUE visionary and leader running Microsoft is a cancer that cannot be fixed by adding a body part such as another company. Ignoring cancel does not cure it.
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Posted by Bob
6:55 PM, Mar 27, 2008
Maybe they could pay them in MSFT options instead of YHOO ones? Oh right, those have done even worse that YHOO over the past 5 years. Nevermind.