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Yahoo gives new CFO big raise to leave his old job
Wednesday - 9/26/2012, 2:18pm EDT
SAN FRANCISCO (AP) - Yahoo's new chief financial officer is getting a big raise to join the struggling Internet company.
Ken Goldman, who will become Yahoo's CFO next month, is starting out with an annual salary of $600,000 and could earn a bonus of up to $540,000, according to documents filed Wednesday. He is also getting restricted stock and stock options valued at $12 million.
The stock awards will gradually vest over the next three to four years, and could end up being worth more or less than $12 million. That depends on how Yahoo's long-slumping stock fares under a new management team led by Marissa Mayer, who became the company's CEO two months ago.
The pay package represents a significant bump from Goldman's current job as CFO of Fortinet Inc., a security software maker based in Sunnyvale, Calif., less than five miles from Yahoo Inc.'s headquarters in the same city.
Fortinet paid Goldman an annual salary of $327,818, according to the company's most recent compensation disclosures six months ago. Goldman, 63, also was eligible for a bonus of about $200,000 at Fortinet. Including stock options and other awards, Goldman's total 2011 compensation package at Fortinet was valued at $1.6 million.
Although Goldman already is in line to make more money in his new job, Yahoo also agreed to give him some additional restricted stock to compensate him for some of the long-term incentives he is giving up at Fortinet. The so-called "make-whole" payment consists of 76,000 units of restricted Yahoo stock that will be doled out on a monthly basis during the next year. Yahoo didn't place a value on this batch of restricted stock. At Yahoo's current market value, the restricted stock would be worth about $1.2 million.
Yahoo's stock has been sagging for years as the company fell behind Google Inc. and Facebook Inc. in the race for online advertising revenue. The shares added a penny to $15.68 in afternoon trading.
Mayer, a former Google executive, is drawing up a new business plan in Yahoo's latest turnaround attempt. As part of that process, Mayer decided to bring in a new CFO to help execute her strategy.
Goldman's starting salary at Yahoo matches what his predecessor, Tim Morse, was getting before his responsibilities were expanded in a management shake-up last year. After Yahoo fired Carol Bartz as its CEO, Morse served as the company's interim leader for four months. Yahoo raised Morse's salary from $600,000 to $750,000.
Yahoo hasn't disclosed whether Morse, 43, will receive a severance package when he leaves the company.
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)