Carol Bartz' Total Compensation Plan As Yahoo! Ceo

Carol Bartz Compensation Plan as CEO of Yahoo! (Source: SEC filings on Jan. 23 & Feb. 25, 2009 and Yahoo!'s 2009 proxy filing)

Components of the Bartz Plan 1. The "Make-Up Grant" Why? Source:

For Carol's "forfeiture of the value of equity grants and post-employment medical coverage from" AutoDesk

http://www.sec.gov/Archives/edgar/data/1011006/000117911009001932/xslF345X03/edgar.xml

Total Shares Granted Exercise Price 639,386 $0.00

25% of these shares vest in separate blocks on 3/31/09, 6/30/09, 9/30/09 & 12/31/09

Likely Avg. Stock Price for 2009 $15.50

Total Value of Vested Grants by End of 09 $9,910,483.00

Possible Future Value of Stock Price

Potential Value of these Vested Grants if sold later at Higher Price

$17.60 $20.53 $23.46 $26.39 $29.33 $35.19

$11,253,193.60 $13,124,996.12 $14,999,995.56 $16,874,995.01 $18,749,994.45 $22,499,993.34

2. The "Inducement Option" Why? Source:

No reason given; presumably to "induce" Carol to get the stock price up -- no bad thing.

http://www.sec.gov/Archives/edgar/data/1011006/000117911009001932/xslF345X03/edgar.xml

# of Shares from grant to Vest at Potential Total Value of different future Future Increase over Vested Grants by Total Shares Granted stock prices Exercise Price Stock Price Exercise Price End of 09 5,000,000 $11.73 1,666,667 $17.60 150% $9,783,333.33 833,333 $20.53 175% $21,993,750.00 833,333 $23.46 200% $39,100,000.00 416,667 $26.39 225% $54,984,375.00 416,667 $29.33 250% $73,312,500.00 833,333 $35.19 300% $117,300,000.00 These options to buy shares must be exercised before 1/30/2016; 7 years from grant date. Once stock price trades for 20 consecutive days above this price (or there's a change of control), these options vest

3. Retention Bonus Why? Source:

Not named in filing but induces Carol to stay in order to collect all shares.

http://www.sec.gov/Archives/edgar/data/1011006/000117911009003711/xslF345X03/edgar.xml

# of Shares from grant to Vest at Potential different future Future Total Shares Granted stock prices Exercise Price Stock Price Vesting Dates 162,070 $0.00 40,518 $25.00 1/30/2010 40,518 $25.00 1/30/2011 40,518 $25.00 1/30/2012 40,518 $25.00 1/30/2013

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Potential Value of Vested Grants $1,012,937.50 $1,012,937.50 $1,012,937.50 $1,012,937.50

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These shares vest on Carol's anniversary date over the next 4 years (as long as she's still there). Carol doesn't have to cash them out on these dates; these are only the dates she gets the shares. The future stock price at which point she cashes in the shares might be higher or lower than $25.

4. Performance Bonus Why? Source:

Not named in filing but induces Carol to stay in order to collect all shares.

http://www.sec.gov/Archives/edgar/data/1011006/000117911009003711/xslF345X03/edgar.xml

A. Cash Flow Bonus * Board has right to double this share grant Total Shares Granted to a max of: Exercise Price

Potential Future Stock Price Vesting Date

$0.00 1/30/2012 324,140 $25.00 Board can award this amount on Carol's 3rd anniversary date for hitting cash flow targets. The targets themselves are not disclosed.

Potential Value of Vested Grants

162,070

$8,103,500.00

B. Stock Price Bonus * Board has right to double Potential this share grant Future Potential Value of Total Shares Granted to a max of: Exercise Price Stock Price Vesting Date Vested Grants 162,070 $0.00 324,140 $25.00 1/30/2012 $8,103,500.00 Board can award this amount on Carol's 3rd anniversary date for hitting total shareholder returns targets. The targets themselves are not disclosed.

5. Additional Stock Option Bonus Why? Source:

Not named in filing but is a further inducement for Carol to increase the stock price.

http://www.sec.gov/Archives/edgar/data/1011006/000117911009003711/xslF345X03/edgar.xml

# of Shares from grant to Vest at Potential different future Future Total Shares Granted stock prices Exercise Price Stock Price Vesting Date 355,870 $12.48 88,968 $25.00 1/30/2010 88,968 $25.00 1/30/2011 88,968 $25.00 1/30/2012 88,968 $25.00 1/30/2013 The right to exercise these stock options expire on 2/25/2016; 7 years from grant date. Carol doesn't have to cash them out on these dates; these are only the dates she gets the shares. The future stock price at which point she cashes in the shares might be higher or lower than $25.

Potential Value of Vested Options $1,113,873.10 $1,113,873.10 $1,113,873.10 $1,113,873.10

6. Base Salary Why? Source: Base Salary: $1mm / year

Needed of course; Max allowed by SEC in order to maintain tax deductability is $1mm / year.

http://www.sec.gov/Archives/edgar/data/1011006/000119312509092231/ddef14a.htm Page 52 Future Years Base Salary 12/31/2009 $1,000,000.00 12/31/2010 $1,000,000.00 12/31/2011 $1,000,000.00 12/31/2012 $1,000,000.00

7. Target Annual Bonus Why? Source:

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Not stated but presumably to further induce Carol to increase the cash flow and stock returns.

http://www.sec.gov/Archives/edgar/data/1011006/000119312509092231/ddef14a.htm

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Page 52 Annual Bonus: 2x Base Salary with the option to be up to 4x Base Salary

Future Years 12/31/2009 12/31/2010 12/31/2011 12/31/2012

Target Max Bonus $4,000,000.00 $4,000,000.00 $4,000,000.00 $4,000,000.00

8. Additional "Make-Up Grant" Annual Cash Payments Why?

For Carol's "forfeiture of the value of equity grants and post-employment medical coverage from" AutoDesk $2.5mm of the original $10mm fair value date grant is to be paid to her in cash - not stock (described in pt 1. above).

Source:

http://www.sec.gov/Archives/edgar/data/1011006/000119312509092231/ddef14a.htm Page 52

Make-Up Grant Cash Payments $2,500,000.00 To be paid out in quarterly annual payments as per the proxy filing.

Vesting Dates 3/31/2009 6/30/2009 9/30/2009 12/31/2009

Expected Total 4 Year Compensation for Carol Bartz if all targets hit: 2009 Compensation for Carol Bartz if all targets hit: (including Yahoo!'s stock reaching $17.60 for 20 trading days by end of 2009)

Cash Payments $625,000.00 $625,000.00 $625,000.00 $625,000.00

$187,014,235.74 $29,320,626.93

Note: this amount includes vested stock options and grants which Carol would be eligible to sell, but likely wouldn't sell. Therefore, their value might go up or down in the future until she does choose to sell. Additionally, the company will pay up to $150,000 in expenses to cover Carol's advisory fees for negotiating her employment agreement. http://www.sec.gov/Archives/edgar/data/1011006/000089161809000005/f51094e8vk.htm Source:

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