Investors angry as Yahoo bosses cash in
CEO and her team of executives have sold large tranches of stock while internet search engine struggles.
Investors are questioning the long-term loyalty of Carol Bartz, who was parachuted in to run Yahoo nine months ago, after it emerged that she and her team of top executives have sold millions of dollars in stock while the internet search engine struggles to turn around its ailing business.
According to regulatory filings, Bartz has made two major stock sales in the past nine months - more than $830,000 (£500,000) in March and a further $1.14m in June.
The 61-year-old former boss of the software company AutoDesk, who also receives a salary of $1m and is eligible for an annual bonus worth up to $4m, was granted options on 5m shares of Yahoo stock when she took the top job at the beginning of the year.
The news does not fit with the image she has tried to portray since taking over at the company earlier this year, hired as a pragmatic and efficient replacement for Yahoo's co-founder, Jerry Yang.
Bartz has played up her image in public, saying she wanted to buy the web giant "some friggin' breathing room" and accusing staff of spending too much time talking about their problems and not doing enough to fix them. "We are the largest media property on the internet," she wrote in a memo to staff last week.
"So get out of the sugar low - we have work to do. Stop staring at our navels, stop arguing with each other. Stop debate, debate, debate and let's focus on the competition."
However, the news that she and other executives have sold so much stock has upset some investors, including Eric Jackson of Ironfire Capital, an outspoken shareholder who has become well known for his criticisms of Yahoo's management in recent years.
While executives are entitled to sell the options that they had been given, he said that Bartz was sending the wrong message by exercising so many of her stock options so soon after joining the company.
"Two million already cashed out for Bartz is too much, too soon," he said in an email, adding that it "doesn't really fit with her 'I didn't need this job as I was retired' image she portrays".
The company defended her actions by saying that the share sales were necessary for tax purposes. "We are told that they were re-acquired to satisfy tax withholdings," a spokeswoman said.
That is unlikely to boost flagging morale among the company's 13,000 employees - particularly since it is not only Bartz who has been cashing in her options while the company struggles.
Figures also show that several other executive directors made hundreds of thousands of dollars each at the end of August, with a flurry of activity ahead of a sales window that closed last Monday.
Meanwhile Yahoo's general counsel, Mike Callahan, has made more than $1.35m (£820,000) across five separate stock sales this year alone - twice the amount of shares that he sold in the preceding year.
All this activity bears little reflection on Yahoo's overall health, given that the company has suffered an inexorable slide in recent years amid strong competition from rivals including Google and Microsoft.
In its latest financial results, the company said that revenue for the past three months was down 13% from the same period last year to $1.5bn (£900m), while profit rose slightly to $141m (£86m).
Bartz's influence appears to have had little impact on the company's bottom line so far, however, with her biggest achievement being the agreement earlier this summer to hand over control of Yahoo's search engine business to Microsoft.
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