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Yahoo CEO accused of dumping shares

Yahoo CEO accused of dumping shares

Carol Bartz, who earns $1 million per year as Yahoo's CEO, is accused of damaging morale by selling stock options in the company.

Yahoo's investors are concerned over news that CEO Carol Bartz has sold almost $2 million (£1.22 million) of her stock in the company in the nine months she has worked there - and are beginning to question her loyalty to the company.

As reported by The Guardian, Bartz - who was previously in charge of CAD specialist AutoDesk, and who left semi-retirement to take the $1 million a year post at Yahoo after co-founder Jerry Yang left - was given options on five million Yahoo shares when she started as an incentive to lead the company well.

Sadly, rather than have faith in the future of Yahoo under her leadership - and rely on both the seven-figure salary and $4 million annual bonus that the CEO role is eligible for - Bartz chose to sell the stock, making a $830,000 sale in March and a larger sale of $1.14m in June.

While stockholders are, of course, welcome to do as they wish with their shares, many in the company - investors and employees alike - consider the move to be extremely harmful to morale. With other top executives at the company following her lead - with general counsel Mike Callahan having sold $1.35 million stock options so far this year - people are becoming concerned that the current leadership at the company doesn't have faith that the current troubles faced by Yahoo can be overcome.

Yahoo investor Eric Jackson, of Ironfire Capital, has stated that "two million already cashed out for Bartz is too much, too soon" and that the move "doesn't really fit with her 'I didn't need this job as I was retired' image."

A statement from Yahoo defending Bartz's stock sales claims that the move in no way represents a lack of faith on her part, instead claiming "that they [the shares] were re-acquired to satisfy tax withholdings."

As the investors squabble over this latest move by management, Yahoo continues to shrink: with its search business flagging despite interest from Microsoft, overall revenue for the last three months was reported as being down 13 percent year-on-year - although somehow the company managed a slight rise in profits over the same period. How long the company can keep getting smaller in a market dominated by Google remains to be seen.

Do you believe the story that the stock sales were simply to get a tax break, or should Yahoo's management have more faith in the company they're paid to lead? Share your thoughts over in the forums.

15 Comments

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mi1ez 8th September 2009, 15:40 Quote
Goodbye Yahoo?
AshT 8th September 2009, 16:09 Quote
She needs to be sacked maybe?
l3v1ck 8th September 2009, 16:09 Quote
They're her shares, she can do what she likes. Yahoo have to except that when they give board members such huge stock options.
steveo_mcg 8th September 2009, 16:14 Quote
If i owned Yahoo shares i'd be dumping them as well.

However they may be her shares to do with as she pleases but if you really believe the company is going places (which the ceo should) why sell them they'll be worth x% more i a few weeks/months/years. Its not like she needs the money.
Bursar 8th September 2009, 16:23 Quote
Quote:
Originally Posted by l3v1ck
They're her shares, she can do what she likes.
Technically they're not, and she can't. Options are quite different to actual shares, and there are different rules that apply to them.
tejas 8th September 2009, 16:26 Quote
She sold the shares in order to get that photo above photoshopped and touched up... tsk tsk

Her appearance as of now is vastly different to that official pic of her!! Just google it if you don't believe me!
AshT 8th September 2009, 16:27 Quote
Brilliant argument there l3v1ck. You obviously have a business brain on today.

except*accept?
AshT 8th September 2009, 16:28 Quote
tejas ... lol you are so right ;)

http://www.adweek.com/adweek/photos/stylus/67032-Carol_Bartz.jpg

A uni photo maybe? Or certainly early days.
thehippoz 8th September 2009, 16:29 Quote
balmer sitting around naked in his living room.. read this on his wall computer- hit a bunch of service bells that went bing@! (he had his mexican servant buy them)
drlecter 8th September 2009, 17:09 Quote
For anyone that doesn't see the problem with this, two words: Insider Dealing.

People with stock options have to be careful when they sell shares, if she sells her shares, people might be think that she knows something about the company's future that they don't. Which could in turn cause others to loss confidence and damage the value of the company (and it's happened many times before).

For legal reasons I should point out that I am not accusing anyone of doing anything.
xprodancer 9th September 2009, 02:39 Quote
Quote:
Originally Posted by mi1ez
Goodbye Yahoo?

should have died years ago!!!!!!!!!!
SMIFFYDUDE 9th September 2009, 05:12 Quote
Quote:
Originally Posted by tejas
She sold the shares in order to get that photo above photoshopped and touched up... tsk tsk

Her appearance as of now is vastly different to that official pic of her!! Just google it if you don't believe me!

LOL "Google it", talk about kicking someone while their down.
DXR_13KE 9th September 2009, 16:12 Quote
Yah who?
Otto69 9th September 2009, 18:45 Quote
None of the execs that came from Sun Microsystems impressed me except for Eric Schmidt, who had the good sense to leave long long ago. Bartz did nothing useful at Sun. Apparently she's now doing the same at Yahoo.
BurningFeetMan 9th September 2009, 23:41 Quote
Lol fat cats. I wonder how they sleep at night. =\
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