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February 8, 2008, 2:31 pm

Yahoo execs’ big pay day from a Microsoft deal

By Michal Lev-Ram

The Microhoo deal is still far from over, but you can bet every one of Yahoo’s 14,300 employees are wondering what the $44.6 billion bid from Microsoft means for them.

The fate of Yahoo’s top executives — co-founders Jerry Yang and David Filo and president Susan Decker — remains unclear. Will Microsoft clean house or try to retain some of Yahoo’s (YHOO) higher-ups? More importantly, will top Yahoos even want a corner office in Redmond?

Whatever happens under a new regime, Yang, Filo and Decker will be provided for financially, to say the least. Based on Microsoft’s (MSFT) bid to buy Yahoo at $31 a share (a 62 percent premium to the share price when the offer was made last Friday), here’s how the three head Yahoos would fare, according to executive compensation research firm Equilar and Securities and Exchange Commission filings:

  • Jerry Yang: Yahoo’s CEO indirectly owns 43,489,864 shares held in trust and 9,314,390 held in a family partnership of Yahoo. If these shares were purchased for $31, they would have a combined value of over $1.6 billion. This value doesn’t include the 6,310 shares held by Yang’s wife, for which he disclaims beneficial ownership.
  • David Filo: Filo stays out of the limelight but directly owns close to 80,000,000 shares of Yahoo. At the proposed $31 price per share, they would be worth more than $2.4 billion.
  • Susan Decker: Decker holds an estimated 634,676 shares directly and 6,161,667 options. Under Microsoft’s valuation, they’d have a value of over $54 million.

But don’t expect any “golden parachutes” for these Yahoos — according to research firm Equilar and company records, there’s no evidence Yahoo would give its execs cash severance benefits in the event of a take-over. However, the company does have an agreement with Decker stating that some of her previously vested options will remain exercisable for an additional three years if she leaves the company.

As for majority of Yahoo’s employees — the non-billionaires — it’s not clear how they would fare under a Microsoft acquisition. The struggling search engine (and I mean Yahoo) had already said it would lay off 1,000, or 7 percent, of its workforce sometime this month. It’s likely Microsoft would make more cuts should the deal go through.

you all are stupid, the article says Filo owns 80,000,000 not 80,000…that is 80 million shares not 80 thousand…so yes 2.4 billion is correct

Posted By Carlos, Manhattan, NY : February 23, 2008 3:56 pm

Sometimes money is not the only thing one should consider.

Posted By Sean Loke, Kuala Lumpur. : February 18, 2008 12:59 am

LOL…you people act like you discovered the Theory of Relativity. Give the guy a break.

Posted By John, Los Angeles, CA. : February 12, 2008 4:41 pm

.

with $2.4 billion + $1.6 billion = $4 billion why don’t Filo & Yang (simply) start something NEW after selling Yahoo?

or (maybe) they’ve no new web-ideas?

—————————–
Gaetano Marano - Italy
http://www.ghostNASA.com/
http://www.NewSpaceAgency.com/

Posted By Gaetano Marano - Italy : February 9, 2008 3:35 am

Thanks for your corrections. The error has been fixed: Filo owns close to 80 MILLION, not 80 THOUSAND shares.

Posted By mlevram : February 8, 2008 5:39 pm

Decimal error on David Filo estimation:
80k * $31 = $2.4 million, not billion

Posted By Christian, Derry, NH : February 8, 2008 3:05 pm

Your math is wrong for David Filo

Posted By Anonymous : February 8, 2008 3:02 pm

Is the math correct in this article?
IT says Yahoo’s CEO indirectly owns 43,489,864 and others shares valued at 1.6billion.
But Davido filo owns only 80,000 shares and this article says they would be worth 2.4billion.

Posted By puzzled, OR : February 8, 2008 3:00 pm

Shouldn’t David Filo’s cut be 2.4 MILLION instead of Billion?

Just a thought since he owns the least amount of shares and yet still holds some of the highest potential profit from selling according to this writeup.

Posted By Stephen, Tampa, Florida : February 8, 2008 2:56 pm

“David Filo: Filo stays out of the limelight but directly owns close to 80,000 shares of Yahoo. At the proposed $31 price per share, they would be worth more than $2.4 billion.”
_____________________________

is that the “new math” i’ve been hearing about? in the old days…

80,000 x $31 = 2,480,000…

or just shy of 2.5 MILLION, not BILLION.

i think what you meant was that Filo owns something like 80 million shares…

Posted By Leo Stotch, calculator owner, Kansas City KS : February 8, 2008 2:55 pm

Check your math. If Filo owns 80 thousand shares, that would convert to $2.4 “M”illion not “B”illion.

Posted By Math Man, Tampa, Florida : February 8, 2008 2:54 pm

Your numbers are wrong for Filo worth by my math unless you have some shares hidden in the equation.

Posted By Me, Redmond, Wa : February 8, 2008 2:54 pm

learn to do math. 80,000 shares at $31 worth more than 2.4 billion?

Posted By Anonymous : February 8, 2008 2:45 pm

For Filo, I think you mean $2.4 MILLION, if indeed he has 80,000 shares

Posted By Van Vuong, Pasadena, CA : February 8, 2008 2:44 pm

80,000*31 is not 2.4 billion

Posted By don’t post this, just fix, thanks : February 8, 2008 2:44 pm
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