CEO Equity Awards (2015)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Award
|
|
Type
|
|
Approval
Date
|
|
Vesting
Tranche
|
|
Performance
Period
|
|
[A]
Approval
Date
Value ($)
(1)
|
|
[B]
SCT
Accounting
Value ($)
(2)
|
|
[C]
Vested
April 1, 2016
Value ($)
(3)
|
|
|
|
|
|
|
|
|
Retention
|
|
Performance option
|
|
July 2012
|
|
4 of 5
|
|
2015
|
|
$3,000,000
|
|
$19,935,777
|
|
$6,303,006
|
|
|
|
|
|
|
|
|
2013 Annual
|
|
Performance RSU
|
|
February 2013
|
|
3 of 3
|
|
2015
|
|
2,000,000
|
|
4,237,138
|
|
498,134
|
|
|
|
|
|
|
|
|
2014 Annual
|
|
Performance RSU
|
|
February 2014
|
|
2 of 3
|
|
2015
|
|
2,000,000
|
|
2,258,359
|
|
265,501
|
|
|
|
|
|
|
|
|
2015 Annual
|
|
Performance RSU
|
|
March 2015
|
|
1 of 3
|
|
2015
|
|
2,000,000
|
|
2,000,021
|
|
235,114
|
|
|
|
|
|
|
|
|
|
|
Time-based RSU
(3 year vesting)
|
|
March 2015
|
|
n/a
|
|
n/a
|
|
6,000,000
|
|
5,999,976
|
|
5,038,654
|
Total Value for 2015
|
|
$15,000,000
|
|
$34,431,271
|
|
$12,340,409
|
|
(1)
|
Approval Date Values reflect the value of the vesting tranche at the time the award was originally approved by the
Compensation Committee, which value was used at that time to determine the number of shares subject to the award (at target in the case of performance-based vesting awards). These amounts include award portions that were later forfeited
due to performance shortfalls (
i.e.
, these Approval Date Values have not been adjusted to reflect below-target vesting).
|
|
(2)
|
SCT Accounting Values reflect the fair value of each performance tranche as determined under applicable SEC and
accounting rules on the date on which the Compensation Committee established the performance goals for the applicable performance period (which was February 27, 2014 for the 2014 tranches and March 6, 2015 for the 2015 tranches). These amounts are
included as 2014 and 2015 compensation for Ms. Mayer in the Stock Awards and Option Awards columns of the Summary Compensation Table (SCT), with the Total Value for each year in the table above being the sum of
Ms. Mayers Stock Awards and Option Awards reported in the Summary Compensation Table for the corresponding year. Performance-based vesting awards are taken into account at target. These amounts therefore
include the award portions that were later forfeited due to performance shortfalls (
i.e.
, these Accounting Values have not been adjusted to reflect below-target vesting).
|
|
(3)
|
The 2015 performance RSU tranches vested at 14 percent of target and the 2015 performance option tranches vested at 47
percent of target, as discussed under Long-Term Incentive Equity Awards, above. The 2014 performance RSU tranches vested at 36 percent of target and the 2014 performance option tranches vested at 69 percent of target, as discussed in our
proxy statement for last years annual meeting (under CD&ALong-Term Incentive Equity Awards).
|
|
|
Vested Values reflect the value of the award portions that vested or are still eligible to vest, based on the $36.48
closing price of our common stock on April 1, 2016. With respect to RSUs, the value is the number of RSUs vested or still eligible to vest multiplied by the closing price of our common stock on that date. With respect to options, the value is the
number of options vested or still eligible to vest multiplied by the difference between the closing price of our common stock on that date and the per share exercise price of the option. The balance of each tranche was forfeited and is no longer
eligible to vest.
|
|
|
For each year, 100 percent of the time-based RSUs granted in that year are included in column [C] because a portion of
the awards have vested and Ms. Mayer continues to be eligible to vest in the balance of the awards.
|
36
|
|
None of the options covered by the 2014 or 2015 tranches of these awards has been exercised by Ms. Mayer (whose
exercises to date have been limited to the vested portions of her 2013 performance tranches). Ms. Mayer has also not sold any shares received in payment of any vested RSUs. (Shares were withheld from the payment of RSUs to cover tax withholding
obligations and this chart is presented before taking such withholding into account.)
|
The following chart shows
the percentage change in the daily closing prices of Yahoo common stock and the Nasdaq-100 index from July 16, 2012 (Ms. Mayers hire date) through April 1, 2016, using the closing price on July 16, 2012 as the base.
Yahoo Stock Price Percentage Change
from
July 16, 2012 (CEO hire date) through April 1, 2016
Grant Practices
The Compensation Committee has adopted a schedule for granting new-hire and retention equity awards. Under this schedule, equity awards
are granted at scheduled meetings throughout the year, except during Closed Window Periods (as defined below), when no equity awards may be granted. This schedule is designed so that awards are not granted during the period commencing on the tenth
day of the last month of each quarter and ending two business days after our quarterly earnings release (the Closed Window Period).
37
Severance and Change-in-Control Severance Benefits
Severance Agreements.
We have entered into severance arrangements with our senior officers, including the Named Executive
Officers (other than Mr. Filo), to provide severance should Yahoo terminate their employment in certain circumstances. These agreements are referred to as Severance Agreements. The Compensation Committee believes that providing our
executives with specified benefits in the event of a termination of employment by Yahoo without cause is consistent with competitive practices. It also helps us retain executives and maintain leadership stability. Furthermore, the
Compensation Committee believes that adopting uniform terms, as reflected in the Severance Agreements, helps to ensure that our executives are treated fairly and consistently, and helps avoid the need to negotiate severance in connection with each
termination of employment.
We provided Severance Agreements to Ms. Mayer, Mr. Goldman, Mr. Bell, and Ms. Utzschneider in the form
approved by the Compensation Committee (see Potential Payments upon Termination or Change in ControlExecutive Severance Agreements, below). These Severance Agreements reflect any specific severance arrangements negotiated and
included in the executives offer letter.
Change-In-Control Severance.
We maintain Change-in-Control
Severance Plans that, together, cover all of our full-time employees, including each Named Executive Officer.
The
Compensation Committee believes that the occurrence, or potential occurrence, of a change-in-control transaction may create uncertainty for our executives and other key employees. The Change-in-Control Severance Plans are designed to help retain our
employees and maintain a stable work environment leading up to and during changes in control by providing employees certain economic benefits in the event their employment is actually or constructively terminated in connection with such a change.
Benefits under the Change-in-Control Severance Plans are provided only on a double-trigger basis, which means that
benefits are paid only if two events occur: a change in control of Yahoo and a termination of the participants employment. Furthermore, the plans do not provide tax gross-ups for potential excise or other taxes on any benefits that are paid.
We have the ability, subject to certain limitations, to terminate or amend the plans before a change in control.
Equity Award
Provisions.
Recipients of long-term incentive equity awards are also entitled to limited severance benefits with respect to awards granted before the applicable severance event. The Compensation Committee believes that these benefits are
consistent with general competitive practices and that they help maximize executive retention, which is one of Yahoos objectives in making the awards.
The material terms of the Severance Agreements and the Change-in-Control Severance Plans, as well as any benefits that may be provided
to the Named Executive Officers under their respective employment or equity award agreements in connection with a termination of their employment or a change in control, are described below in the section titled Potential Payments Upon
Termination or Change in Control.
Other Benefits
We provide security services for Ms. Mayer and her immediate family (in addition to security provided at business facilities and during
business events). We believe that all Company-incurred security costs are necessary and for the Companys benefit, and that the reported amount of security expense is especially reasonable in light of the fact that Ms. Mayer does not ask the
Company to reimburse her private aircraft costs for business travel. In addition, during 2015 Ms. Mayer faced specific security threats that we believed were credible. The Companys incremental cost to provide such personal security services
was $544,061 for 2015, which SEC rules require us to report as compensation to the CEO in the Summary Compensation Table. However the Compensation Committee does not consider this item to be a compensatory perk and authorized these arrangements for
business purposes regardless of any value they may have to Ms. Mayer personally. The security budget for Ms. Mayer and her family and the specific security concerns justifying it are reviewed by the Compensation Committee on an annual basis.
38
The Named Executive Officers are also eligible to participate in the Companys 401(k)
plan and health and welfare benefit programs made available to the Companys employees generally. The Company does not maintain any executive retirement or health programs or provide other material perks to the executives.
In 2015, Ms. Mayer also earned a cash bonus of $1,125 under the Companys Invention Recognition Award program (which is open to all
full-time employees) for being among the inventors named in a pending patent application filed by the Company.
Material Compensation
Committee Actions After 2015
In March 2016, the Compensation Committee approved cash and equity compensation for 2016 for each of the Companys Named Executive
Officers. The Compensation Committee did not increase any Named Executive Officers base salary or target bonus for 2016.
The Compensation Committee also approved the grant of annual equity awards for 2016 to each of Ms. Mayer, Mr. Goldman, Mr. Bell, and Ms.
Utzschneider. These awards were in the form of RSUs similar to the annual equity awards for 2015 described above. All of the RSUs vest over four years (or three years in the case of Ms. Mayer). One-half of the RSUs awarded to each Named Executive
Officer are time-based awards that will vest in equal monthly installments. The other half of the RSUs awarded to our Named Executive Officers are subject to performance-based vesting requirements each year and vest in annual installments. Under
both types of awards, the Compensation Committee put a cap on any potential acceleration following a change in control: if the double-trigger conditions are met, each awards acceleration is capped at the number of shares otherwise
scheduled to vest during the 24 months following the executives termination (in the case of performance-based awards, acceleration is capped at the number of shares that would vest at target for the performance year in which the termination
occurs and the immediately following performance year, if any). (See Potential Payments Upon Termination or Change in Control.)
The performance metrics and goals for the performance-based RSUs will be set at the beginning of each year. For 2016, the metrics used
to measure the Companys performance (and their weightings) for these awards will be the Companys revenue (one-third), revenue ex-TAC (one-third), and adjusted EBITDA (one-third), each as defined for purposes of the awards and subject to
specified adjustments. However, if the overall vesting percentage determined using these metrics exceeds 100 percent, the excess over 100 percent will be capped at the Companys total shareholder return for 2016. For example, if the vesting
percentage would otherwise be 140 percent and the Companys total shareholder return for 2016 is 10 percent, the vesting percentage would be capped at 110 percent (and conversely, if the Companys total shareholder return for 2016 is zero
or negative, the vesting percentage would be capped at 100 percent). These metrics will also be used to determine vesting for the tranches of the performance RSUs and performance options granted to our Named Executive Officers in prior years that
are eligible to vest based on our 2016 performance.
The Compensation Committee also adopted the 2016 Executive Incentive Plan,
which follows the same general framework as our 2015 Executive Incentive Plan described above. Under this plan annual cash bonuses for 2016 will be determined by multiplying each participants target bonus by a company performance factor and an
individual performance factor, each as determined after year end. The individual performance factor will be based on the Committees assessment of each participants individual performance for the year. The Company performance factor will
be based on the Companys financial performance and operational performance in 2016. The metrics used to determine financial performance will be revenue, revenue ex-TAC, and adjusted EBITDA. However, if the financial performance component of
the Company performance factor would result in a payout factor greater than 100 percent, the excess over 100 percent for this component will be capped at the Companys total shareholder return for 2016 in the same manner as described in the
paragraph above. As with 2015, there is an overall bonus limit based on a percentage of our 2016 adjusted EBITDA and individual bonus limits for each participant. No minimum cash payment is required under the plan and the Compensation Committee
retains discretion under the plan to reduce the amount (including to $0) of any bonus otherwise payable to a participant based on performance.
39
The Committee chose to use revenue and revenue ex-TAC as financial metrics for the 2016
performance equity awards and the 2016 Executive Incentive Plan because growing revenue (both through our owned and operated sites and through our distribution network) is the most critical strategic imperative for the Company as it continues to try
to get back on a growth trajectory. The Company uses both these measures in evaluating the business and gives quarterly guidance on both to investors. (Revenue ex-TAC is the revenue we retain after paying traffic acquisition costs (or
TAC) to our distribution network.) The Committee also chose to use adjusted EBITDA as a financial metric in both programs to help ensure that revenue growth is not pursued to the detriment of earnings.
The Compensation Committee also chose to use two measures in the short-term cash bonus planthe Companys operational
performance and each executives individual performancethat are
not
used in the performance-based equity program.
For 2016, the Committee continued the practice of setting annual goals as the Company is still going through a transition period and the
Committee believes that it must maintain the flexibility to assess the Companys evolving progress on its strategic plan to achieve sustainable growth in order to set appropriate and rigorous performance goals. The Committee intends to begin
setting multi-year performance goals once the Company is further along in achieving its strategic growth plans and setting long-term goals becomes more feasible.
In April 2016, our Board of Directors amended the Change-in-Control Severance Plans, which together cover all full-time employees of the
Company, to clarify that a sale of all or substantially all of the Companys operating business would constitute a change in control for purposes of the plans, and the Compensation Committee approved conforming amendments to the
definition of Change in Control in the equity award agreements of our executives (including the Named Executive Officers).
In April 2016, the Compensation Committee also amended our executives Severance Agreements (including those of the Named Executive
Officers) to provide that, if the executive is terminated without cause, any time-based vesting event scheduled within six months after his or her termination date will accelerate. Previously, such acceleration generally applied only to annual
vesting installments (i.e., any annual cliff) within that same six-month period. Given that the Company has generally moved to monthly vesting rather than annual cliff vesting for new time-based equity awards over the past three years
since the Severance Agreements were approved, the amendment was motivated by a desire to preserve the originally intended benefit level in the new context.
Independent Consultant and Peer Group
The Compensation Committee
retains an independent consultant, Frederic W. Cook & Co. (FW Cook), to advise it on executive and director compensation. FW Cook provides no other services to Yahoo. The Compensation Committee has assessed the independence of FW
Cook and concluded that its engagement of FW Cook does not raise any conflict of interest with the Company or any of its directors or executive officers.
To assist the Compensation Committee during 2015, FW Cook reported on trends and regulatory developments in executive and director
compensation, identified peer companies as points of comparison, assessed compensation-related risk, compiled market data on compensation levels and practices, and made recommendations from supporting analyses covering executive compensation
philosophy, program design and structure, and compensation levels and mix for our executive officers and Board members.
Because we
operate in a highly competitive industry, identifying the most comparable competitors was an important first step in the Compensation Committees decision-making process for 2015. FW Cook obtained and evaluated data on peer companies from SEC
filings. Where the peer company data on comparable management positions was lacking, the Compensation Committee also considered compensation survey data from the Radford Executive Survey. The Compensation Committee used this information to guide its
decisions on executive compensation, including the reasonableness of those arrangements in relation to the competitive demands of our industry.
40
In consultation with FW Cook, the Compensation Committee considered compensation data for
the following companies for 2015:
|
|
|
Adobe Systems Incorporated
Amazon.com Inc.
AOL Inc.
Apple Inc.
eBay Inc.
Electronic Arts Inc.
Facebook, Inc.
Google Inc.
|
|
Groupon,
Inc.
Intuit Inc.
LinkedIn Corporation
Microsoft Corporation
Oracle Corporation
salesforce.com, inc.
Twitter, Inc.
|
We refer to this group of companies as our peer group or our peer companies for
2015. We selected these companies as our peers based on the following considerations:
|
they have technology or media components that are similar to our business,
they compete with us for
talent, and/or
they have
certain financial characteristics in common with us.
|
However, given the breadth of our business and the rapidly changing environment in which we compete, we found it
difficult to identify directly comparable companies. Each peer group company is comparable to us in certain respects, but not in others. For example, we include Google, Apple, Facebook, and Microsoft in our peer group even though their market
capitalizations and annual revenues are larger than ours because they are among the key technology companies with which we regularly compete for talent, and we consider these differences in size and value when making actual pay decisions. How
companies structure their top management also complicates the comparisons. A company still run by its founders, for example, may have a very different compensation arrangement from a company that hires outside executives, which we attempt to take
into account.
Based on these criteria, the Compensation Committee determined that the peer group for 2015 would consist of the same
companies (identified above) as the peer group for 2014 except that, applying the criteria noted above, Zynga Inc. was removed from the peer group for 2015. Based on publicly available information, as of the beginning of 2015 when the peer group was
selected, Yahoo ranked above the median of the peers in market capitalization and number of employees and just below the median of the peers in revenue.
The Compensation Committee believes that the nature of our business and the environment in which we operate require flexibility. When
setting compensation, the Compensation Committee considers the facts and circumstances and applies them to each individual executive. The Compensation Committee does not try to target specific market levels or match any particular peers. Instead,
the peer group compensation data creates a context for competitive pay levels and informs the Compensation Committees decisions.
Stock Ownership Policy and Holding Requirements
As described above, we
believe that our executive officers should have a significant financial stake in Yahoo. To better align the interests of our executive officers with those of our shareholders, we have adopted a stock ownership policy that requires key personnel to
hold specified amounts of Yahoo stock. Under the policy, the Chief Executive Officer should own Yahoo common stock with a value of at least six times his or her base salary (for an ownership requirement of approximately 165,000 shares for Ms. Mayer,
based on our April 1, 2016 stock price), and each of our other executive officers should own Yahoo common stock with a value of at least two and a half times the executives base salary (or approximately 41,000 shares for each of Mr. Goldman,
Ms. Utzschneider, and Mr. Bell, based on our April 1, 2016 stock price).
41
Ms. Mayer significantly exceeds her ownership requirement under our policy, as she holds
over 1.3 million shares as of April 1, 2016. All of our other Named Executive Officers also currently satisfy the applicable ownership requirement, with ownership on such date of approximately 195,000 shares by Mr. Bell; 177,000 shares by Mr.
Goldman; 43,000 shares by Ms. Utzschneider; and 70.7 million shares by Mr. Filo.
Shares subject to unvested or unexercised equity
awards are not considered owned by the executive for purposes of the policy. An executive covered by the policy who does not satisfy the applicable stock ownership level must retain at least 50 percent of the net shares that executive receives upon
exercise or payment, as the case may be, of a Yahoo equity award for as long as he or she is covered by the policy or until the applicable ownership level is met. For this purpose, the net shares received upon exercise or payment of an
award are the total number of shares received, less the shares needed to pay any applicable exercise price of the award and any tax obligations related to the exercise or payment.
Recoupment Policy
We maintain a recoupment
(clawback) policy for incentive awards paid to executive officers (including all of the Named Executive Officers). In the event of a restatement of incorrect Yahoo financial results, this policy permits the Board, if it determines
appropriate in the circumstances and subject to applicable laws, to seek recovery of the incremental portion of the incentive awards paid or awarded, whether in cash or equity, to our executive officers in excess of the awards that would have been
paid or awarded based on the restated financial results.
Policy with Respect to Section 162(m)
Under Section 162(m) of the Internal Revenue Code, a corporation cannot take a tax deduction in any tax year for compensation it pays to
its Chief Executive Officer and certain other executive officers in excess of $1 million. Compensation that qualifies as performance-based, however, is excluded from the $1 million limit if, among other requirements, the compensation is
payable only upon attainment of pre-established, objective performance goals under a plan approved by the corporations shareholders.
The Company and the Compensation Committee review and consider the deductibility of executive compensation under Section 162(m). We
believe that the gains realized at the time of exercise of nonqualified stock options granted under the terms of our shareholder-approved stock plan are deductible in accordance with Section 162(m). In addition, the Compensation Committee generally
structures performance-based grants of RSUs with the intent that they qualify for deductibility in accordance with Section 162(m) (though the 2015 tranche of Ms. Utzschneiders promotion grant of performance-based RSUs did not so qualify
because it was granted in connection with her July promotion and was therefore granted after the applicable Section 162(m) deadline for the performance year). As described above, the Compensation Committee also structured the 2015 Executive
Incentive Plan with the intent that bonuses paid to the Named Executive Officers (other than Ms. Utzschneider because she was not in an executive position at the time the plan was adopted) under the plan would qualify for deductibility under Section
162(m). The rules and regulations promulgated under Section 162(m) are complicated, however, and subject to change from time to time, sometimes with retroactive effect. In addition, a number of requirements must be met in order for particular
compensation to qualify under Section 162(m). There can be no assurance that the compensation intended to qualify for deductibility under Section 162(m) awarded or paid by the Company will be fully deductible. The Compensation Committee does from
time to time approve compensation arrangements for our executive officers that do not satisfy the requirements of Section 162(m) when it believes that other considerations outweigh the tax deductibility of the compensation. In addition,
discretionary bonuses and time-based vesting RSUs do not satisfy the requirements of Section 162(m). We also believe time-based vesting RSUs are an appropriate component of our executive compensation program for the reasons discussed above in this
CD&A.
42
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the disclosures contained in the CD&A section of this report.
Based on this review and discussion, the Compensation Committee recommended to the Board that the CD&A section be included in this annual report on Form 10-K.
Compensation and Leadership Development
Committee of the Board of Directors
Jane E. Shaw (Chair)
Maynard Webb
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dr. Shaw and Mr. Webb served
on the Compensation Committee during 2015. No person who served as a member of the Compensation Committee during 2015 was or is an officer or employee of the Company. No executive officer of the Company serves or served as a director or member of
the compensation committee of another company that during 2015 employed or employs any member of the Companys Compensation Committee or Board.
COMPENSATION TABLES
The tables on the following pages present compensation information regarding our Chief Executive Officer, Marissa A. Mayer; our Chief
Financial Officer, Ken Goldman; our co-founder and Chief Yahoo, David Filo; our Chief Revenue Officer, Lisa Utzschneider; and our General Counsel, Ronald S. Bell. These five individuals are our Named Executive Officers. We did not have
any other executive officers in 2015.
As required by SEC rules, in these tables performance-based awards are treated as having been
granted in the year in which their performance goals were established (and if an award has multiple performance periods, the portion relating to each period is treated as a separate grant).
43
Summary Compensation Table20132015
The following table presents 20132015 summary compensation information for our Named Executive Officers. As required by SEC rules,
stock awards (RSUs) and option awards are shown as compensation for the year in which they were treated as granted for accounting purposes (even if they have multi-year vesting schedules), and are valued based on their grant date fair values for
accounting purposes. Accordingly, the table includes stock and option awards granted in the years shown even if they were scheduled to vest in later years, and even if they were subsequently forfeited (such as upon the executives termination).
Therefore, the stock and option columns do
not
report whether the officer realized a financial benefit from the awards (such as by vesting in stock or exercising options).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
|
Salary
($)
(1)
|
|
|
Bonus
($)
(1)
|
|
|
Stock
Awards
($)
(2)(3)(4)
|
|
|
Option
Awards
($)
(2)(3)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
(5)
|
|
|
All Other
Compensation
($)
(6)
|
|
|
Total
($)
(2)
|
|
|
|
|
|
|
|
|
|
|
Marissa A. Mayer
|
|
|
2015
|
|
|
|
1,000,000
|
|
|
|
1,125
|
(7)
|
|
|
14,495,494
|
(8)
|
|
|
19,935,777
|
(8)
|
|
|
0
|
|
|
|
548,711
|
|
|
|
35,981,107
|
|
Chief Executive Officer
|
|
|
2014
|
|
|
|
1,000,000
|
|
|
|
0
|
|
|
|
11,752,355
|
|
|
|
28,194,288
|
|
|
|
1,108,800
|
|
|
|
28,065
|
|
|
|
42,083,508
|
|
|
|
|
2013
|
|
|
|
1,000,000
|
|
|
|
2,250
|
|
|
|
8,312,316
|
|
|
|
13,847,283
|
|
|
|
1,700,000
|
|
|
|
73,863
|
|
|
|
24,935,712
|
|
|
|
|
|
|
|
|
|
|
Ken Goldman
|
|
|
2015
|
|
|
|
600,000
|
|
|
|
0
|
|
|
|
3,357,738
|
|
|
|
10,992,129
|
|
|
|
0
|
|
|
|
4,650
|
|
|
|
14,954,517
|
|
Chief Financial Officer
|
|
|
2014
|
|
|
|
600,000
|
|
|
|
0
|
|
|
|
2,813,080
|
|
|
|
9,327,427
|
|
|
|
300,000
|
|
|
|
4,549
|
|
|
|
13,045,056
|
|
|
|
|
2013
|
|
|
|
600,000
|
|
|
|
0
|
|
|
|
2,597,612
|
|
|
|
2,290,527
|
|
|
|
500,000
|
|
|
|
4,615
|
|
|
|
5,992,754
|
|
|
|
|
|
|
|
|
|
|
David Filo
|
|
|
2015
|
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
Co-Founder and Chief Yahoo
|
|
|
2014
|
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
|
|
|
2013
|
|
|
|
1
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
Lisa Utzschneider
(9)
|
|
|
2015
|
|
|
|
600,000
|
|
|
|
1,000,000
|
(10)
|
|
|
8,409,813
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,650
|
|
|
|
10,014,463
|
|
Chief Revenue Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald S. Bell
|
|
|
2015
|
|
|
|
600,000
|
|
|
|
0
|
|
|
|
3,887,359
|
|
|
|
0
|
|
|
|
0
|
|
|
|
4,650
|
|
|
|
4,492,009
|
|
General Counsel
|
|
|
2014
|
|
|
|
600,000
|
|
|
|
0
|
|
|
|
3,282,107
|
|
|
|
0
|
|
|
|
300,000
|
|
|
|
4,549
|
|
|
|
4,186,656
|
|
|
|
|
2013
|
|
|
|
600,000
|
|
|
|
0
|
|
|
|
3,896,386
|
|
|
|
0
|
|
|
|
450,000
|
|
|
|
4,615
|
|
|
|
4,951,001
|
|
|
(1)
|
Salary and bonus columns include amounts earned in, or awarded for performance during, the specified year (even if paid
out early in the following year).
|
|
(2)
|
As required by SEC rules, the stock and option award columns present the aggregate grant date fair value of equity
awards granted during the years shown as computed for accounting purposes in accordance with FASB ASC 718. As a result, the stock and option columns (as well as the total column) include awards that have not yet vested and performance-based awards
that failed to vest; therefore, these columns are
not
intended as presentations of pay actually realized by the executive. For information on the assumptions used in the grant date fair value computations, refer to Note 14Employee
Benefits in the Notes to Consolidated Financial Statements in our 2015 Form 10-K.
|
|
(3)
|
For a list of 2015 stock and option awards, see the Grants of Plan-Based Awards Table, below.
|
|
(4)
|
The 2013, 2014, and 2015 rows of the Summary Compensation Table above include performance-based options and
performance-based RSUs that were scheduled to vest based on the Companys financial performance in 2013, 2014, and 2015, respectively (in addition to time-based requirements). Under the terms of these performance awards, the goals for each
performance period were established by the Compensation Committee in the early part of the period. As noted above, performance-based awards are treated for accounting purposes (and for purposes of our tables) as having been granted on the date their
performance goals were established and, if an award has multiple performance periods, the portion (or tranche) of the award relating to each period is treated as a separate grant. As required by SEC rules, we calculate each
tranches grant date fair value based on the performance outcome we judged to be
probable
when the goals were set. In every case, we considered target performance to be probable, so the grant date fair values included in our tables are
based on our expectation that these performance awards would vest at target. Under their terms, the performance options cannot vest in excess of target, whereas the performance RSUs can vest up to 200 percent of target. The following tables present
the grant date fair values of the performance RSUs annual tranches under two sets of assumptions: (a) assuming that the annual performance target would be achieved, which we originally judged to be the probable outcome, and
(b) assuming that the highest level of performance condition would be achieved:
|
44
|
|
|
|
|
|
|
|
|
2015 Performance-Based Restricted Stock Unit
Awards
|
Name
|
|
Tranche
|
|
Grant Date Fair Value
(Based on Probable Outcome)
($)
|
|
Grant Date Fair Value
(Based on Maximum Performance)
($)
|
|
|
|
|
Marissa A. Mayer
|
|
2015
|
|
2,000,021
|
|
4,000,042
|
|
|
|
|
Ken Goldman
|
|
2015
|
|
375,018
|
|
750,035
|
|
|
|
|
Lisa Utzschneider
|
|
2015
|
|
3,409,847*
|
|
6,819,693*
|
|
|
|
|
Ronald S. Bell
|
|
2015
|
|
375,018
|
|
750,035
|
|
*
|
Includes performance-based recruitment and promotion awards for Ms. Utzschneider.
|
|
|
|
|
|
|
|
|
|
2014 Performance-Based Restricted Stock Unit
Awards
|
Name
|
|
Tranche
|
|
Grant Date Fair Value
(Based on Probable Outcome)
($)
|
|
Grant Date Fair Value
(Based on Maximum Performance)
($)
|
|
|
|
|
Marissa A. Mayer
|
|
2015
|
|
2,258,359
|
|
4,516,717
|
|
|
2014
|
|
2,000,017
|
|
4,000,034
|
|
|
|
|
Ken Goldman
|
|
2015
|
|
423,453
|
|
846,906
|
|
|
2014
|
|
375,006
|
|
750,011
|
|
|
|
|
Ronald S. Bell
|
|
2015
|
|
423,453
|
|
846,906
|
|
|
2014
|
|
375,006
|
|
750,011
|
|
|
|
|
|
|
|
|
|
2013 Performance-Based Restricted Stock Unit
Awards
|
Name
|
|
Tranche
|
|
Grant Date Fair Value
(Based on Probable Outcome)
($)
|
|
Grant Date Fair Value
(Based on Maximum Performance)
($)
|
|
|
|
|
Marissa A. Mayer
|
|
2015
|
|
4,237,138
|
|
8,474,275
|
|
|
2014
|
|
3,752,364
|
|
7,504,728
|
|
|
2013
|
|
2,078,068
|
|
4,156,137
|
|
|
|
|
Ken Goldman
|
|
2015
|
|
1,059,284
|
|
2,118,569
|
|
|
2014
|
|
938,091
|
|
1,876,182
|
|
|
2013
|
|
519,522
|
|
1,039,045
|
|
|
|
|
Ronald S. Bell
|
|
2015
|
|
1,588,905
|
|
3,177,810
|
|
|
2014
|
|
1,407,117
|
|
2,814,234
|
|
|
2013
|
|
779,273
|
|
1,558,546
|
|
|
Prior to 2013, we did not award any performance RSUs to these Named Executive Officers.
|
|
(5)
|
This column reports bonuses under the Companys cash bonus plan (the Executive Incentive Plan) earned in the
specified year and paid early in the following year.
|
|
(6)
|
Amounts presented in the All Other Compensation column for 2015 include: for Ms. Mayer, security services
for which the Company paid $544,061 (which services were in addition to security provided at business facilities and during business travel), Company 401(k) plan matching contributions of $4,500, and group term life insurance premiums valued at
$150; and for each of the other Named Executive Officers, Company 401(k) plan matching contributions of $4,500, and group term life insurance premiums valued at $150.
|
|
|
Pursuant to arrangements between the Company and its preferred air travel vendor, Ms. Mayer also received upgraded
frequent flyer status, at no incremental cost to Yahoo.
|
|
(7)
|
Under the Companys Invention Recognition Award program, which is open to all full-time employees, Ms. Mayer earned
a bonus of $1,125 for being among the inventors named in a pending patent application filed by the Company.
|
45
|
(8)
|
Ms. Mayers stock and option award totals for 2014 and 2015 include multiple awards. Some of them are
performance-based awards that our Compensation Committee approved prior to the year in question, but which are considered 2014 or 2015 grants under applicable SEC and accounting rules because their goals that relate to 2014 or 2015 performance were
established early in that particular year. (Under applicable accounting rules, the portion of an award applicable to a particular performance period is deemed to be granted on the date the goals for that period are set, and its accounting value is
determined based on that dates closing stock price.) This means that the 2014 and 2015 portions of the performance awards granted to Ms. Mayer (and our other Named Executive Officers) in an earlier yearwhen our stock price was
significantly lowerare appearing as 2014 and 2015 compensation in the table above based on Yahoos appreciated stock price in effect when the applicable performance goals were set by the Compensation Committee (namely, February 27, 2014
for the 2014 performance period and March 6, 2015 for the 2015 performance period). There is a significant difference between the original approval value and the later accounting value of the performance awards included in Ms. Mayers 2014 and
2015 compensation rows in the table above. To illustrate this difference, the following table presents Ms. Mayers 2014 and 2015 compensation rows as above, except that the Stock Award and Option Award values are based on the value of our stock
when the Compensation Committee originally approved the awards, rather than when it approved the performance goals.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Original Approval Value
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
|
|
|
Stock Awards
($)
|
|
Option Awards
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
Marissa A. Mayer
|
|
2015
|
|
1,000,000
|
|
1,125
|
|
12,000,000
|
|
3,000,000
|
|
0
|
|
548,711
|
|
16,549,836
|
|
|
2014
|
|
1,000,000
|
|
0
|
|
10,000,000
|
|
5,000,000
|
|
1,108,800
|
|
28,065
|
|
17,136,865
|
|
|
For more details regarding the original approval value of Ms. Mayers stock and option awards compared with their
accounting values as reflected in the Summary Compensation Table, and the impact of performance-based forfeitures, see CEO Equity Awards in the CD&A on page 34.
|
|
(9)
|
Ms. Utzschneider was appointed as our Chief Revenue Officer in July 2015 and was confirmed by the Board as a Section 16
executive officer on August 25, 2015. As permitted by SEC rules, the table above does not present Ms. Utzschneiders compensation prior to the year of her appointment as an executive officer.
|
|
(10)
|
Ms. Utzschneider received a sign-on bonus of $1 million that vested in 2015 pursuant to her employment agreement.
|
Grants of Plan-Based Awards Table2015
The following table presents all plan-based awards granted to the Named Executive Officers during 2015. For a description of these
awards, see the CD&A, above, and the Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table, below.
In accordance with SEC rules, this table treats performance awards as having been granted on the date their performance goals were
established (and if an award has multiple performance periods, the portion (or tranche) relating to each period is treated as a separate grant).
The column Grant Date Fair Value of Stock and Option Awards presents the aggregate grant date fair value of each grant (as
computed for financial accounting purposes), which does not reflect whether the executive realized a financial benefit from the grant (such as by vesting in stock or exercising options).
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(1)
|
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(2)
|
|
|
All Other
Stock
Awards:
Number of
Shares
of Stock
|
|
|
Exercise
or Base
Price of
Option
|
|
Grant Date
Fair Value
of Stock
and
Option
|
|
Name
|
|
Grant
Date
|
|
|
Threshold
($)
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
or Units
(3)
(#)
|
|
|
Awards
($/Share)
|
|
Awards
($)
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Marissa A. Mayer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Option
(2015 tranche of retention award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
761,537
|
|
|
|
(6)
|
|
|
|
|
|
|
18.87
|
|
|
19,935,777
|
|
Annual Cash Bonus Opportunity
|
|
|
3/6/2015
|
|
|
(7)
|
|
|
2,000,000
|
|
|
|
4,000,000
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
Performance RSU
(2015 tranche of 2013 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
97,540
|
|
|
|
195,080
|
|
|
|
|
|
|
|
|
|
4,237,138
|
|
Performance RSU
(2015 tranche of 2014 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
51,988
|
|
|
|
103,976
|
|
|
|
|
|
|
|
|
|
2,258,359
|
|
Performance RSU
(2015 tranche of 2015 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
46,041
|
|
|
|
92,082
|
|
|
|
|
|
|
|
|
|
2,000,021
|
|
Time-Based RSU
(2015 annual award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,121
|
|
|
|
|
|
5,999,976
|
|
|
|
|
|
|
|
|
|
|
|
|
Ken Goldman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Option
(2015 tranche of recruitment award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
419,894
|
|
|
|
(6)
|
|
|
|
|
|
|
18.87
|
|
|
10,992,129
|
|
Annual Cash Bonus Opportunity
|
|
|
3/6/2015
|
|
|
(7)
|
|
|
540,000
|
|
|
|
1,080,000
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
Performance RSU
(2015 tranche of 2013 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
24,385
|
|
|
|
48,770
|
|
|
|
|
|
|
|
|
|
1,059,284
|
|
Performance RSU
(2015 tranche of 2014 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
9,748
|
|
|
|
19,496
|
|
|
|
|
|
|
|
|
|
423,453
|
|
Performance RSU
(2015 tranche of 2015 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
8,633
|
|
|
|
17,266
|
|
|
|
|
|
|
|
|
|
375,018
|
|
Time-Based RSU
(2015 annual award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,530
|
|
|
|
|
|
1,499,983
|
|
|
|
|
|
|
|
|
|
|
|
|
David Filo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Cash Bonus Opportunity
|
|
|
3/6/2015
|
|
|
(7)
|
|
|
0
|
|
|
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa Utzschneider
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Cash Bonus Opportunity
(10)
|
|
|
8/27/2015
|
|
|
(7)
|
|
|
540,000
|
|
|
|
1,080,000
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
Performance RSU
(2015 tranche of recruitment award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
49,721
|
|
|
|
99,442
|
|
|
|
|
|
|
|
|
|
2,159,880
|
|
Performance RSU
(2015 tranche of promotion award)
|
|
|
8/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
37,102
|
|
|
|
74,204
|
|
|
|
|
|
|
|
|
|
1,249,966
|
|
Time-Based RSU
(2015 promotion award)
|
|
|
8/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148,411
|
|
|
|
|
|
4,999,967
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald S. Bell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Cash Bonus Opportunity
|
|
|
3/6/2015
|
|
|
(7)
|
|
|
540,000
|
|
|
|
1,080,000
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
Performance RSU
(2015 tranche of 2013 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
36,577
|
|
|
|
73,154
|
|
|
|
|
|
|
|
|
|
1,588,905
|
|
Performance RSU
(2015 tranche of 2014 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
9,748
|
|
|
|
19,496
|
|
|
|
|
|
|
|
|
|
423,453
|
|
Performance RSU
(2015 tranche of 2015 award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
8,633
|
|
|
|
17,266
|
|
|
|
|
|
|
|
|
|
375,018
|
|
Time-Based RSU
(2015 annual award)
|
|
|
3/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,530
|
|
|
|
|
|
1,499,983
|
|
47
|
(1)
|
Amounts represent cash bonus opportunities under the Companys Executive Incentive Plan (EIP). Each
participant in the Executive Incentive Plan is assigned a target bonus each year, as shown in the target column. For 2015, the Executive Incentive Plan provided that each executives actual bonus would be determined by adjusting his
or her target bonus by (a) a Company performance factor and (b) an individual performance factor. The Company performance factor would be determined by the Compensation Committee based on (i) the Companys performance relative to financial
goals established by the Committee early in the year and (ii) the Committees assessment of the Companys operational performance in 2015. The individual performance factor would be determined by the Compensation Committee based on the
individuals performance. The Compensation Committee retained discretion under the Executive Incentive Plan to adjust bonuses upwards or downwards (including to zero), but only within the plans overall performance-based funding limit of
three percent of the Companys adjusted EBITDA (as defined in the plan and subject to further adjustments set forth in the plan), which limit was further allocated among the Named Executive Officers as described in notes (6) and (7) below. In
addition, bonuses under the plan could not exceed 200 percent of the executives target bonus. The Executive Incentive Plan bonuses actually paid to our Named Executive Officers for 2015 are presented in the Summary Compensation Table under the
heading Non-Equity Incentive Plan Compensation.
|
|
(2)
|
Each annual performance-based award tranche was subject to both performance-based and time-based vesting requirements.
This means that, in addition to satisfying the performance-based requirements (described in the CD&A), in order to vest the grantee must also remain continuously employed by the Company through the vesting date specified in the award agreement,
which (a) for the 2015 performance RSUs was the date on which the Compensation Committee certified the prior years performance (i.e., March 7, 2016) and (b) for the 2015 tranche of the performance options was January 26, 2016.
|
|
(3)
|
The time-based RSU award to Ms. Mayer is subject to vesting over 3 years in 36 equal monthly installments, and the
time-based RSU awards to the other Named Executive Officers are subject to vesting over 4 years in 48 equal monthly installments.
|
|
(4)
|
As required by SEC rules, these amounts present the aggregate grant date fair value of the awards computed in accordance
with FASB ASC 718. These amounts do not reflect whether the recipient has actually realized a financial benefit from the awards (such as by vesting in stock or exercising options). For information on the valuation assumptions used in the grant date
fair value computations, see Note 14Employee Benefits in the Notes to Consolidated Financial Statements included in our 2015 Form 10-K.
|
|
(5)
|
The 2015 tranches of the performance options and performance RSUs did not have any vesting thresholds. As described in
the CD&A, each 2015 tranche was subject to three performance measures: revenue, revenue ex-TAC, and adjusted EBITDA. The portion of each tranche allocated to each measure would not vest if the Company did not achieve that measures minimum
performance level. If the Company performed above that measures minimum level but less than 100 percent of its target level, the portion of the tranche allocated to that measure would vest between zero percent and 100 percent, as further
described in the CD&A, see 2015 Executive Compensation ProgramLong-Term Incentive Equity Awards.
|
|
(6)
|
As described in the CD&A, the performance options cannot vest over 100 percent of target.
|
|
(7)
|
There was no threshold bonus under the 2015 Executive Incentive Plan.
|
|
(8)
|
Under the Executive Incentive Plan, Ms. Mayers maximum bonus for 2015 was the lesser of 1.5 percent of the
Companys adjusted EBITDA (subject to adjustment as set forth in the plan document) and 200 percent of her target bonus. The Executive Incentive Plan authorized the Compensation Committee to exercise downward discretion from such limit to
establish her actual bonus, based on the factors described in note (1) above. (Ms. Mayers Executive Incentive Plan bonus is also subject to the maximum limit on performance-based bonuses set forth in the Stock Plan.)
|
48
|
(9)
|
Under the Executive Incentive Plan, the maximum individual bonus for each of Messrs. Goldman and Bell was the lesser of
0.5 percent of the Companys adjusted EBITDA (subject to adjustment as set forth in the plan document) and 200 percent of the executives target bonus. Under the Executive Incentive Plan, the maximum individual bonus for Mr. Filo was 0.5
percent of the Companys adjusted EBITDA (subject to adjustment as set forth in the plan document). Under the Executive Incentive Plan, the maximum individual bonus for Ms. Utzschneider was 200 percent of her target bonus. The Executive
Incentive Plan authorized the Compensation Committee to exercise downward discretion from such limits to establish each executives actual bonus, based on the factors described in note (1) above. (In all cases, the Executive Incentive Plan
bonuses were also subject to the maximum limit on performance-based bonuses set forth in the Stock Plan.)
|
|
(10)
|
As noted below under Non-Equity Incentive Plan Awards, Ms. Utzschneider was designated as a participant in
the Executive Incentive Plan in connection with her July 2015 promotion to an executive position.
|
Narrative Disclosure
to Summary Compensation Table and Grants of Plan-Based Awards Table
Employment Agreements and Recruitment Grants
Marissa A. Mayer.
In July 2012, the Company entered into an employment offer letter with Ms. Mayer to serve as
our Chief Executive Officer. The letter has no specified term, and Ms. Mayers employment with the Company is on an at-will basis. The letter provides that Ms. Mayer will receive an annual base salary of $1 million. She will also be eligible
for an annual bonus under the Companys Executive Incentive Plan with a target amount of 200 percent of base salary. Both base salary and bonus are subject to annual review. Ms. Mayer is also eligible to participate in the benefit programs
generally available to senior executives of the Company and is entitled to 20 days of vacation per year during the first four years of her employment. The Company also agreed to pay for certain of Ms. Mayers security expenses. The security
budget for Ms. Mayer and her immediate family is currently reviewed by the Compensation Committee on an annual basis.
The letter
provides for Ms. Mayer to receive the following equity awards, all of which have been granted:
|
|
|
2012 Annual Equity Award (Vesting Over Three Years).
We typically grant equity awards to executives annually. Ms.
Mayers equity award for 2012 was provided for in her offer letter because she was not employed at the start of the year when we made awards to our other executives. As provided in the offer letter:
|
|
¡
|
|
one-half of her 2012 award was in the form of time-based RSUs (which were granted on July 26, 2012) with a target
valuation of $6 million vesting in three equal annual installments from the date of grant; and
|
|
¡
|
|
the other one-half (with a target valuation of $6 million) was in the form of performance-based stock options with three
performance periods: the first half of 2013, full year 2013, and full year 2014. Each tranche was scheduled to vest shortly after the end of its performance period. All of the options were granted on November 29, 2012 with an exercise price of
$18.87 per share (equal to the closing market price of our common stock on the date of grant) and a maximum term of seven years. The overall number of 2012 options (which were evenly distributed among the tranches) was determined by dividing the
target value by the per-share grant date fair value of our employee stock options as of July 26, 2012. Each performance tranche appears in our compensation tables separately as though it were a separate award granted on the date its goals were set,
as required by SEC rules.
|
49
|
|
|
One-Time Retention Award (Vesting Over Five Years)
. As provided in the offer letter:
|
|
¡
|
|
one-half of this award was in the form of time-based RSUs (which were granted on July 26, 2012) with a target valuation
of $15 million vesting in five equal annual installments from the date of grant; and
|
|
¡
|
|
the other one-half (with a target valuation of $15 million) was in the form of performance-based stock options with five
performance periods: the first half of 2013, and full years 2013, 2014, 2015, and 2016. Each tranche is scheduled to vest shortly after the end of its performance period. The retention options were granted on November 29, 2012 with an exercise price
of $18.87 per share and a maximum term of seven years. The overall number of retention options (which are evenly distributed among the tranches) was determined by dividing the target valuation by the per-share fair value of our employee stock
options as of July 26, 2012. Each performance tranche is appearing in our compensation tables separately as though it were a separate award granted on the date its goals were set (which was March 6, 2015, in the case of the 2015 tranche), as
required by SEC rules.
|
|
|
|
One-Time Make-Whole Award (Vesting Over 29 Months).
As provided in her offer letter, Ms. Mayer was granted
time-based RSUs with a target valuation of $14 million on July 26, 2012 to replace a portion of the compensation value that she forfeited by leaving her previous employer. These RSUs vested monthly from her date of hire as follows: four-fourteenths
(4/14) of the RSUs vested in five equal monthly installments from August through December, 2012; seven-fourteenths (7/14) of the RSUs vested in twelve equal monthly installments in 2013; and three-fourteenths (3/14) of the RSUs vested in twelve
equal monthly installments during 2014.
|
|
|
|
Ms. Mayers offer letter also provides that, beginning in 2013, she is eligible to receive annual equity awards
when such grants are made to our senior executives.
|
Under the letters express terms, Ms. Mayers cash
incentive bonuses and equity awards are subject to the Companys clawback policies as in effect from time to time.
Ken Goldman
.
In September 2012, the Company entered into an employment offer letter with Mr. Goldman to serve as
our Chief Financial Officer. The letter has no specified term, and Mr. Goldmans employment with the Company is on an at-will basis. The letter provides that Mr. Goldman will receive an annual base salary of $600,000 and be eligible for an
annual bonus under the Companys Executive Incentive Plan with a target amount of 90 percent of base salary. Both base salary and bonus are subject to annual review. Mr. Goldman is also eligible to participate in the benefit programs generally
available to senior executives of the Company and is entitled to 20 days of vacation per year.
The letter provides for Mr. Goldman
to receive the following equity awards, all of which have been granted:
|
|
|
Restricted Stock Units (Vesting Over Four Years).
Mr. Goldmans recruitment RSUs had a target valuation of
$6 million and were granted on October 25, 2012 soon after he joined Yahoo. One-fourth (1/4) of the award vested on the first anniversary of grant, and the remainder is vesting in 36 equal monthly installments through the fourth anniversary of
grant.
|
|
|
|
Performance Stock Options (Vesting Over Three Years).
Mr. Goldmans recruitment award of performance-based
stock options had a total target valuation of $6 million and three performance periods: full years 2013, 2014 and 2015. Each tranche was scheduled to vest shortly after the end of its performance period. All of the options were granted on November
29, 2012 with an exercise price of $18.87 per share (equal to the closing market price of our common stock on the date of grant) and a maximum term of seven years. The overall number of options (which were evenly distributed among the tranches) was
determined by dividing the target value by the fair value of our employee stock options on the grant date. Each performance tranche appears in our compensation tables separately as though it were a separate award granted on the date its goals were
set (which was March 6, 2015, in the case of the 2015 tranche), as required by SEC rules.
|
50
|
|
|
One-Time Make-Whole Award (Vesting Over One Year).
Mr. Goldman was also granted 76,000 RSUs on October 25,
2012 to make up for compensation from his previous employer that he forfeited by accepting employment with Yahoo. These RSUs vested in 12 equal monthly installments following the date of grant.
|
Mr. Goldmans cash incentive bonuses and equity grants are subject to the Companys clawback policies as in effect
from time to time.
Lisa Utzschneider
.
In October 2014, the Company entered into an employment offer letter
with Ms. Utzschneider to serve as our SVP of Sales in the Americas. The letter has no specified term, and Ms. Utzschneiders employment with the Company is on an at-will basis. The letter provides for a base salary of $600,000 per year, a
sign-on bonus of $1 million (which was paid in January 2015), and an annual bonus target equal to 90 percent of base salary. Base salary and bonus are subject to annual review. The sign-on bonus was subject to pro-rata repayment if Ms. Utzschneider
resigned without good reason or was terminated for cause during the first 12 months of her employment. Ms. Utzschneider is also eligible to participate in the benefit programs generally available to senior executives of the Company and is entitled
to 20 days of vacation per year.
The letter also provides for Ms. Utzschneider to receive the equity awards described below, both
of which have been granted.
|
|
|
Time-Based Restricted Stock Units (Vesting Over Four Years).
Ms. Utzschneiders recruitment award of
time-based RSUs had a target valuation of $8 million and was granted on December 3, 2014, soon after she joined Yahoo. One-fourth (1/4) of the award vested on November 18, 2015 (the anniversary of her first day of work) and the remainder is vesting
in 36 equal monthly installments thereafter.
|
|
|
|
Performance-Based Restricted Stock Units (Vesting Over Four Years)
. Ms. Utzschneiders recruitment award of
performance-based RSUs was granted on December 3, 2014 with a target valuation of $8 million and four performance periods: full years 2015, 2016, 2017, and 2018. Each tranche is scheduled to vest shortly after the end of its performance period and
may vest up to 200 percent of target depending upon the Companys performance. The shares subject to the award are allocated among the tranches as follows: five-sixteenths (5/16) of the shares related to 2015 performance, one-fourth (1/4) of
the shares relate to 2016 performance, one-fourth (1/4) of the shares will relate to 2017 performance and three-sixteenths (3/16) of the shares will relate to 2018 performance. Each performance tranche will appear in our compensation tables
separately as though it were a separate award granted on the date its goals are set (which was March 6, 2015, in the case of the 2015 tranche), as required by SEC rules.
|
The overall number of shares subject to the time-based award, and the target number of shares subject to the performance-based award were determined by
dividing each awards target valuation (as provided in the offer letter) by the closing market price of our common stock on the grant date (December 3, 2014).
Ms. Utzschneider became an executive officer in connection with her July 2015 promotion to Chief Revenue Officer. As permitted by SEC
rules, the Summary Compensation Table above does not present compensation information for Ms. Utzschneider prior to 2015.
Ms.
Utzschneiders cash incentive bonuses and equity grants are subject to the Companys clawback policies as in effect from time to time.
Ronald S. Bell
.
In May 1999, the Company entered into an employment offer letter with Mr. Bell. The letter has no
specified term, and Mr. Bells employment with the Company is on an at-will basis. The letter provides that any dispute related to the terms of the employment relationship or its termination shall be settled by binding arbitration.
Mr. Bells cash incentive bonuses and equity grants are subject to the Companys clawback policies as in effect
from time to time.
51
The provisions of these employment letters relating to severance benefits are described in
the section Potential Payments Upon Termination or Change in Control, below.
Equity Awards
The following section describes the equity awards listed in the Grants of Plan-Based Awards Table. Each of those awards was granted
under, and is subject to the terms of, our Stock Plan, which is administered by the Compensation Committee. The Compensation Committee has authority to interpret the plan provisions and make all required determinations under the plan. This authority
includes making required proportionate adjustments to outstanding awards upon the occurrence of certain corporate events such as reorganizations, spin-offs, mergers and stock splits, and making provision to ensure that any tax withholding
obligations incurred in respect of awards are satisfied. Awards granted under the Stock Plan are generally not transferable, except to a beneficiary upon the grantees death. However, the Compensation Committee may establish procedures for the
transfer of awards to other persons or entities, provided that such transfers comply with applicable securities laws.
Under the
terms of the Stock Plan, a change in control of Yahoo does not automatically trigger vesting of the awards then outstanding under the plan. If there is a change in control of Yahoo, each Named Executive Officers outstanding awards granted
under the plan will generally be assumed by the successor company, unless the Compensation Committee provides that the award will not be assumed and will become fully vested and, in the case of options, exercisable. Any options that are vested at
the time of the change in control (including options that become vested in connection with the change in control) generally must be exercised within 30 days after the optionee receives notice of the acceleration.
Performance Options.
The performance options granted to each of Ms. Mayer and Mr. Goldman in connection with their
recruitment by the Company in 2012 are described above in the section Employment Agreements and Recruitment Grants. Although all of the performance options were granted in 2012, their 2015 tranches appear in our compensation tables
separately as though they were granted on the date their goals were set (March 6, 2015), as required by SEC rules. For a discussion of the options 2015 performance metrics and goals, see 2015 Executive Compensation ProgramLong-Term
Incentive Equity AwardsDetermination of Vesting of 2012 Performance Options in the CD&A. On March 4, 2016 the Compensation Committee determined that, based on the Companys performance over full-year 2015, the options 2015
performance tranches would vest at 47 percent of target.
Performance RSUs
.
In February 2013, February
2014, and March 2015, we granted awards of performance-based RSUs to Ms. Mayer, Mr. Goldman, and Mr. Bell as part of the Companys annual grant process, and in August 2015 we granted a performance-based RSU award to Ms. Utzschneider in
connection with her promotion to Chief Revenue Officer. Each award to Ms. Mayer has three annual performance periods (beginning with the year in which the award was granted), and the awards granted to each of the other Named Executive Officers have
four annual performance periods (beginning with the year in which the award was granted).
Each annual performance tranche covers a
full fiscal year, and is scheduled to vest shortly after the end of the year. Each awards total target number of shares is evenly distributed among its tranches, and each tranche may vest up to 200 percent of target depending upon the
Companys performance. Each performance tranche will appear in our compensation tables separately as though it were a separate award granted on the date its goals were set (which was generally March 6, 2015, in the case of the 2015 tranches),
as required by SEC rules.
The Performance RSUs granted to Ms. Utzschneider in connection with her recruitment by the Company in
2014 are described above in the section Employment Agreements and Recruitment Grants.
For a discussion of the
performance metrics and goals applicable to all of our performance RSUs 2015 tranches, see 2015 Executive Compensation ProgramLong-Term Incentive Equity Awards in the CD&A. On March 4, 2016 the Compensation Committee
determined that the 2015 tranches of the Named Executive Officers performance RSUs would vest at 14 percent of target, based on the Companys 2015 performance.
52
Time-Based RSUs.
In March 2015, we granted each of Ms. Mayer, Mr. Goldman,
and Mr. Bell an award of time-based RSUs as part of the Companys annual grant process, and in August 2015 we granted Ms. Utzschneider an award of time-based RSUs in connection with her promotion to Chief Revenue Officer. The award to Ms.
Mayer was scheduled to vest over three years in 36 equal monthly installments, and the awards to Mr. Goldman, Mr. Bell and Ms. Utzschneider were scheduled to vest over four years in 48 equal monthly installments.
Upon vesting, each of the RSUs described above is payable in shares of the Companys common stock on a one-for-one basis. Vesting
of each of the options and RSUs described above is generally subject to the executives continued employment with the Company through the applicable vesting date, subject to accelerated vesting in certain circumstances. Refer to Potential
Payments upon Termination or Change in Control below for information on the severance and change-in-control provisions applicable to the equity awards granted to the Named Executive Officers in 2015.
Non-Equity Incentive Plan Awards
Each of the non-equity incentive plan awards reported in the Grants of Plan-Based Awards Table was granted under, and is
subject to the terms of, our Executive Incentive Plan. Please see the discussion in the CD&A under the heading 2015 Executive Compensation Program2015 Annual Cash Bonuses under the Executive Incentive Plan for a description of
the material terms of awards granted under our Executive Incentive Plan for 2015.
Ms. Utzschneider became an executive in
connection with her July 2015 promotion to Chief Revenue Officer. Prior to that time she was a participant in the Companys bonus plan for lower level employees, the Yahoo Incentive Plan for Excellence and Execution (or YIPEE).
Following her promotion, the Compensation Committee designated Ms. Utzschneider as a participant in the Executive Incentive Plan rather than the YIPEE, at the same target bonus level that applied under the YIPEE (90 percent of base salary), and
confirmed that her bonus under the Executive Incentive Plan for 2015 would be determined as though she had been a participant in that plan for the entire year. Her base salary level was left unchanged ($600,000 per year).
Outstanding Equity Awards at Year-End2015
The following table presents
outstanding equity awards held by the Named Executive Officers at the end of 2015, after giving effect to determinations of our 2015 performance (which means the portions of our performance-based options and RSUs that were forfeited as a result of
our 2015 performance determinations are treated as not outstanding for purposes of this table, while the portions that vested upon such performance determinations (which were made in March 2016) are treated as being subject only to time-based
vesting conditions at year-end 2015). Vesting of the unvested awards shown below is generally conditioned upon the Named Executive Officers continuous employment through the applicable vesting date, but is subject to acceleration on certain
terminations of the executives employment as described in the section Potential Payments upon Termination or Change in Control, below.
As required by SEC rules, if a performance-based award has multiple performance periods, the portion (or tranche) relating
to each period is treated as a separate grant, which is not considered to be outstanding until its goals are established. As of December 31, 2015, we had not established goals for the post-2015 tranches of the performance RSUs and performance
options; accordingly those awards 2016, 2017, and 2018 performance tranches are not presented below.
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
(1)
Unexercisable
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units of
Stock
that
Have
Not
Vested
(#)
(1)
|
|
|
Market
Value
of Shares
or
Units
of
Stock
that
Have
Not
Vested
($)
(2)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
that Have
Not
Vested
(#)
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
that
Have
Not
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
Marissa A. Mayer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
379,748
|
(3)
|
|
|
12,630,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,257
|
(4)
|
|
|
540,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,656
|
(5)
|
|
|
454,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,653
|
(6)
|
|
|
2,017,319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,278
|
(5)
|
|
|
242,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,591
|
(7)
|
|
|
3,445,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,446
|
(5)
|
|
|
214,385
|
|
|
|
|
|
|
|
|
376,383
|
|
|
|
|
|
|
18.87
|
|
11/29/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,384,148
|
|
|
357,922
(8)
|
|
|
|
18.87
|
|
11/29/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ken Goldman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,256
|
(9)
|
|
|
2,503,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,450
|
(10)
|
|
|
946,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,414
|
(5)
|
|
|
113,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,120
|
(11)
|
|
|
702,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,365
|
(5)
|
|
|
45,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,056
|
(12)
|
|
|
933,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,209
|
(5)
|
|
|
40,199
|
|
|
|
|
|
|
|
|
561,444
|
|
|
197,350
(8)
|
|
|
|
18.87
|
|
11/29/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Filo
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa Utzschneider
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116,017
|
(14)
|
|
|
3,858,725
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,961
|
(5)
|
|
|
231,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
136,044
|
(15)
|
|
|
4,524,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,194
|
(5)
|
|
|
172,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald S. Bell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,674
|
(10)
|
|
|
1,419,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,121
|
(5)
|
|
|
170,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
(16)
|
|
|
166,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,120
|
(11)
|
|
|
702,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,365
|
(5)
|
|
|
45,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,056
|
(12)
|
|
|
933,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,209
|
(5)
|
|
|
40,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In accordance with the terms and conditions applicable to the award, each award reported in these columns generally is
subject to early termination in connection with certain terminations of the award holders employment and to acceleration in certain circumstances as described under Potential Payments Upon Termination or Change in Control, below.
|
|
(2)
|
Value is based on the closing price of Yahoo common stock of $33.26 per share on December 31, 2015, as reported on
Nasdaq.
|
|
(3)
|
One-half of these RSUs will vest on July 26, 2016 and the remainder will vest on July 26, 2017.
|
|
(4)
|
One-half of these RSUs vested on January 28, 2016 and the remainder vested on February 28, 2016.
|
|
(5)
|
These performance-based RSUs vested on March 4, 2016 upon the Compensation Committees certification of our
full-year 2015 performance for purposes of this award.
|
54
|
(6)
|
One-fourteenth (1/14) of these RSUs will vest on the 27th day of each month, from January 27, 2016 through
February 27, 2017.
|
|
(7)
|
One-twenty-seventh (1/27) of these RSUs will vest on the 6th day of each month, from January 6, 2016 through
March 6, 2018.
|
|
(8)
|
These performance-based options vested on January 26, 2016 and became exercisable on March 4, 2016 upon the Compensation
Committees certification of our full-year 2015 performance for purposes of this award.
|
|
(9)
|
One-tenth (1/10) of these RSUs will vest on the 25th day of each month, from January 25, 2016 through October 25,
2016.
|
|
(10)
|
One-fourteenth (1/14) of these RSUs will vest on the 28th day of each month, from January 28, 2016 through
February 28, 2017.
|
|
(11)
|
One-twenty-sixth (1/26) of these RSUs will vest on the 27th day of each month, from January 27, 2016 through
February 27, 2018.
|
|
(12)
|
One-thirty-ninth (1/39) of these RSUs will vest on the 6th day of each month, from January 6, 2016 through March 6,
2019.
|
|
(13)
|
Mr. Filo had no outstanding equity awards at year-end 2015.
|
|
(14)
|
One-thirty-fifth (1/35) of these RSUs will vest on the 18th day of each month, from January 18, 2016 through
November 18, 2018.
|
|
(15)
|
One-forty-fourth (1/44) of these RSUs will vest on the 27th day of each month, from January 27, 2016 through
August 27, 2019.
|
|
(16)
|
These RSUs vested on February 27, 2016.
|
Options Exercised and Stock Vested2015
The following table shows
how many stock options our Named Executive Officers exercised, and how many shares of stock vested for them, during 2015. All of the stock vesting events relate to RSUs. This table also shows the aggregate value our Named Executive Officers realized
from such option exercises and RSU vesting events.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
Name
|
|
Number of
Shares Acquired
on Exercise
(#)
|
|
Value Realized
on Exercise
($)
(1)
|
|
|
Number of
Shares Acquired
on Vesting
(#)
|
|
Value Realized
on Vesting
($)
(2)
|
|
|
|
|
|
|
Marissa A. Mayer
|
|
447,000
|
|
|
12,292,639
|
|
|
597,668
|
|
|
23,611,128
|
|
|
|
|
|
|
Ken Goldman
|
|
30,000
|
|
|
737,370
|
|
|
151,324
|
|
|
5,965,670
|
|
|
|
|
|
|
David Filo
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
Lisa Utzschneider
|
|
0
|
|
|
0
|
|
|
55,458
|
|
|
1,824,457
|
|
|
|
|
|
|
Ronald S. Bell
|
|
0
|
|
|
0
|
|
|
88,598
|
|
|
3,602,195
|
|
|
(1)
|
In the case of options, value realized equals the difference between the exercise price and the market price
of our common stock at exercise, multiplied by the number of exercised options.
|
55
|
(2)
|
In the case of stock awards, value realized equals the closing price of our common stock on the vesting date
(or the prior trading day, in the case of weekend or holiday vesting events), as reported by Nasdaq, multiplied by the number of vested shares (including shares withheld by us to cover tax withholding for these awards).
|
Potential Payments Upon Termination or Change in Control
The following sections
describe the benefits that may become payable to our Named Executive Officers in connection with a termination of their employment with the Company and/or a change in control of the Company under arrangements in effect on December 31, 2015.
Executive Severance Agreements
In
February 2013, the Compensation Committee authorized us to enter into agreements regarding severance benefits with Ms. Mayer, Mr. Goldman, and Mr. Bell. In August 2015 the Compensation Committee authorized us to enter into a similar agreement with
Ms. Utzschneider. We refer to these agreements as executive Severance Agreements.
Pursuant to the Severance Agreements,
if the executives employment is terminated by the Company without cause (as defined in the agreement), the executive will be entitled to a severance benefit consisting of:
|
|
|
one year of base salary;
|
|
|
|
one years target annual bonus;
|
|
|
|
if the termination occurs after the end of a fiscal year and before the Companys bonus payments for that fiscal
year, the executives bonus for the completed fiscal year; and
|
|
|
|
payments equal to the premiums required to continue medical benefits under COBRA for up to twelve months after
termination.
|
|
|
|
The executive will also have six months to exercise any vested Company stock options.
|
In addition, in the case of Mr. Goldman and Mr. Bell, the Severance Agreements amended their time-based stock options and time-based
RSUs granted prior to the date of the Severance Agreements to provide that if the executives employment is terminated by the Company without cause, or due to his death or disability, any annual cliff installment scheduled to vest
within six months following such termination will vest on the termination date (except that any more-favorable acceleration terms of the underlying award will be respected). The recruitment grants we made to Ms. Mayer and Ms. Utzschneider already
included provisions regarding accelerated vesting (as described under Equity Awards, below), so no corresponding amendments were included in their respective Severance Agreements. The Severance Agreements do not affect the
Companys Change-in-Control Severance Plans; if applicable in the circumstances of his or her termination, each executive will be entitled to benefits under the applicable Change-in-Control Severance Plan if greater than under the Severance
Agreement.
In April 2016, the Compensation Committee amended the Severance Agreements to provide that, if the executive is
terminated without cause, any time-based vesting event scheduled within six months after his or her termination date will accelerate. Previously, such acceleration generally applied only to annual cliffs within that same six-month period. Given that
the Company has generally moved to monthly vesting rather than annual cliff vesting for new time-based equity awards over the past three years since the Severance Agreements were approved, the amendment was motivated by a desire to preserve the
originally intended benefit level in the new context.
In each case, the executives right to receive benefits under the
Severance Agreement is conditioned on the executives executing and not revoking a release of claims in favor of the Company and complying with the executives obligations under any confidentiality, proprietary information and assignment
of inventions, or similar agreement with the Company.
56
Each Severance Agreement provides that if any payment or benefit received or to be received
by the executive (pursuant to the Severance Agreement or otherwise) would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, then the executives benefits will be reduced to the extent necessary to avoid
such tax, but only if a reduction in benefits would result in the executive receiving a higher net (after-tax) payment than if his or her benefits were not reduced. The estimates included below under Estimated Severance and Change-in-Control
Benefits are presented assuming that no such reduction in benefits would be required.
Change-in-Control Severance Plans
As noted in the CD&A, the Compensation Committee maintains two Change-in-Control Severance Plans that, together, cover all full-time
employees of the Company, including each of the Named Executive Officers.
The Change-in-Control Severance Plans provide that if an
eligible employees employment with the Company is terminated by the Company without cause or by the employee for good reason (as these terms are defined in the applicable Change-in-Control Severance Plan) within one year after a change in
control of the Company, the employee will generally be entitled to receive the following severance benefits:
|
|
|
Continuation of the employees annual base salary, as severance pay, over a designated number of months following
the employees severance date. The number of months will range from four months to 24 months, depending on the employees job level;
|
|
|
|
Reimbursement for outplacement services for 24 months following the employees severance date, subject to a maximum
reimbursement that ranges from $3,000 to $15,000, depending on the employees job level;
|
|
|
|
Continued medical group health and dental plan coverage for the period the employee receives severance pay; and
|
|
|
|
Accelerated vesting of all stock options, RSUs, and any other equity-based awards previously granted or assumed by the
Company and outstanding as of the severance date (unless otherwise set forth in the applicable award agreement for awards made after February 12, 2008).
|
The number of months used to calculate the severance benefit under the Change-in-Control Severance Plans for each Named Executive
Officer is 24 months and the outplacement benefit applicable to each Named Executive Officer is $15,000. The plans do not provide tax gross-ups for potential excise or other taxes on the benefits that may be paid.
Each eligible employee will be entitled to the greater of (a) the severance payments and benefits pursuant to the Change-in-Control
Severance Plans, or (b) the severance benefits under any severance agreement between such employee and the Company (if applicable).
Payment of the foregoing severance benefits is conditioned upon the employees execution of a release of claims in favor of the
Company and compliance with the employees confidentiality, proprietary information and assignment of inventions obligations to the Company.
A change in control would generally be triggered under the Change-in-Control Severance Plans by a person or group of persons
acquiring more than 40 percent of the Companys voting stock, consummation of certain mergers and other transactions where the Companys shareholders own less than 50 percent of the surviving entity, a liquidation of the Company, or
consummation of a sale of all or substantially all of the Companys assets. In April 2016, our Board of Directors amended the plans to clarify that a sale of all or substantially all of the Companys operating business would constitute a
change in control for purposes of the plans.
Each Change-in-Control Severance Plan provides that if benefits payable
under the plan to a participant would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, then the participants benefits will be reduced to the extent necessary to avoid such tax, but only if a reduction in
benefits would result in the participant receiving a higher net (after-tax) payment than if the participants benefits were not reduced. The estimates included below under Estimated Severance and Change-in-Control Benefits are
presented assuming that no such reduction in benefits would be required.
57
Equity Awards
Severance Provisions in Executive Equity Awards Generally.
Under the 2013, 2014, and 2015 annual award
agreements, as well as under Ms. Utzschneiders recruitment awards and promotion awards, if the executives employment is terminated by the Company without cause, or due to his or her death or disability
|
|
|
Time-Based RSUs:
any annual cliff installment of a time-based RSU that is scheduled to vest within six
months following such termination will vest on the termination date;
|
|
|
|
Performance-Based RSUs:
if the termination occurs in the latter half of a performance period, the
shares eligible to vest for such period will be pro-rated based on months worked in the period and will vest based on performance when the period is complete; and
|
|
|
|
Front-Loaded RSUs:
if the award was originally intended to represent more than one years worth
of annual grants, the shares otherwise vesting pursuant to the above two bullets will be divided by the number of years the award was intended to represent and the quotient will vest.
|
Outstanding equity awards granted to Mr. Bell prior to 2013 will be subject to accelerated vesting under his Severance Agreement. In April 2016, the
six-month acceleration previously applicable to annual cliff installments of time-based RSUs as described above was made applicable to all time-based vesting events during such six-month period. See Executive Severance Agreements,
above.
Ms. Mayers Recruitment Grants.
With respect to the retention awards of
RSUs and performance-based options granted to Ms. Mayer in 2012 (see Employment Agreements and Recruitment Grants, above), her employment offer letter and the award agreements provide that if her employment is terminated by the
Company without cause, by Ms. Mayer for good reason, or due to Ms. Mayers death or disability, any portions of the awards that are scheduled to vest within six months after such termination will fully vest, subject, in the case of her stock
options, to meeting the applicable performance criteria.
Mr. Goldmans Recruitment Grants.
The
performance options and RSUs awarded to Mr. Goldman in 2012 (see Employment Agreements and Recruitment Grants, above) provide that if his employment is terminated without cause (or, in the case of the performance options, due to
his death or disability), any portions of the awards that are scheduled to vest within six months after such termination will fully vest, subject, in the case of his stock options, to meeting the applicable performance criteria.
Change in Control.
Under the terms of our Stock Plan, if there is a change in control of Yahoo, each Named
Executive Officers outstanding awards will generally be assumed by the successor company, unless the Compensation Committee provides that the award will not be assumed and will become fully vested and, in the case of options, exercisable. A
change in control of Yahoo would not automatically trigger vesting of the awards then outstanding under the plan.
Our Named
Executive Officers Equity Awards generally include a double-trigger acceleration condition (under which acceleration requires both a change in control and a qualifying termination of employment within one year thereafter) similar to the
double-trigger acceleration provision in the Change-in-Control Severance Plan; these equity awards also have language that excludes the awards from the Change-in-Control Severance Plan. The terms of each of our Named Executive Officers awards
provide that if we terminate the executives employment without cause or if the executive resigns for good reason, in either case within one year after a change in control of the Company, then the entire unvested portion of the award will vest
in full (at target in the case of performance-based awards); provided, however, that such acceleration is capped for purposes of the equity awards granted to our Named Executive Officers in March 2016 (see Material Compensation Committee
Actions After 2015 in the CD&A for more information about these awards generally). For the March 2016 time-based awards, such acceleration is capped at the number of shares otherwise scheduled to vest during the 24 months following the
termination, and for the March 2016 performance-based awards, such acceleration is capped at the target number of shares for the performance year in which the termination occurs and the immediately following performance year, if any. In April 2016,
the Compensation Committee amended our Named Executive Officers outstanding awards to clarify that a sale of all or substantially all of the Companys operating business would constitute a change in control for purposes of the
awards.
58
Estimated Severance and Change-in-Control Benefits
Severance Benefits.
The following table presents the Companys estimate of the benefits to which each of
our Named Executive Officers would have been entitled under the arrangements described above if his or her employment had been terminated by the Company on December 31, 2015 without cause (or, as to some benefits, by the executive for good reason),
and not in connection with a change in control of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Cash
Severance
($)
|
|
|
Continuation of
Health Benefits
($)
|
|
RSU
Acceleration
($)
(1)
|
|
|
Option
Acceleration
($)
(2)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
Marissa A. Mayer
|
|
|
3,000,000
|
|
|
26,324
|
|
|
910,592
|
|
|
|
5,150,498
|
|
|
|
9,087,414
|
|
|
|
|
|
|
|
Ken Goldman
|
|
|
1,140,000
|
|
|
26,324
|
|
|
1,700,850
|
|
|
|
2,839,867
|
|
|
|
5,707,041
|
|
|
|
|
|
|
|
David Filo
(3)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
Lisa Utzschneider
|
|
|
1,140,000
|
|
|
26,324
|
|
|
404,242
|
|
|
|
0
|
|
|
|
1,570,566
|
|
|
|
|
|
|
|
Ronald S. Bell
|
|
|
1,140,000
|
|
|
26,324
|
|
|
294,418
|
|
|
|
0
|
|
|
|
1,460,742
|
|
|
(1)
|
This column reports the intrinsic value of the unvested portions of the executives RSUs that would accelerate in
the circumstances described above (including post-termination performance-based vesting). This value is calculated by multiplying $33.26 (the closing price of our common stock as reported by Nasdaq on December 31, 2015, the hypothetical acceleration
date) by the number of units subject to the accelerated portion of the award.
|
|
(2)
|
This column reports the intrinsic value of the portions of the executives unvested stock options (all of which are
performance-based) that would accelerate in the circumstances described above (including post-termination performance-based vesting). This value is calculated by multiplying (a) the amount by which $33.26 (the closing price of our common stock as
reported by Nasdaq on December 31, 2015, the hypothetical acceleration date) exceeds the exercise price of the option, by (b) the number of shares subject to the accelerated portion of the option.
|
|
(3)
|
As a founder of the Company with a significant equity stake, Mr. Filo is not party to a Severance Agreement.
|
59
Change-in-Control Severance Benefits.
The following table presents
the Companys estimate of the severance benefits to which each of our Named Executive Officers would have been entitled under the arrangements described above if his or her employment had been terminated by the Company without cause (or, as to
some benefits, by the executive for good reason) on December 31, 2015, and assuming for purposes of this illustration that such date was within 12 months after a hypothetical change in control of the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Cash
Severance
($)
(1)
|
|
|
Continuation of
Health Benefits
($)
(1)
|
|
Outplacement
Benefits
($)
|
|
RSU
Acceleration
($)
(2)(4)
|
|
|
Option
Acceleration
($)
(3)(4)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
Marissa A. Mayer
|
|
|
3,000,000
|
|
|
26,324
|
|
15,000
|
|
|
29,930,208
|
|
|
|
21,917,049
|
|
|
|
54,888,581
|
|
|
|
|
|
|
|
|
Ken Goldman
|
|
|
1,200,000
|
|
|
54,227
|
|
15,000
|
|
|
8,828,036
|
|
|
|
6,042,275
|
|
|
|
16,139,538
|
|
|
|
|
|
|
|
|
David Filo
|
|
|
2
|
|
|
54,227
|
|
15,000
|
|
|
0
|
|
|
|
0
|
|
|
|
69,229
|
|
|
|
|
|
|
|
|
Lisa Utzschneider
|
|
|
1,200,000
|
|
|
54,227
|
|
15,000
|
|
|
18,611,598
|
|
|
|
0
|
|
|
|
19,880,825
|
|
|
|
|
|
|
|
|
Ronald S. Bell
|
|
|
1,200,000
|
|
|
54,227
|
|
15,000
|
|
|
7,775,456
|
|
|
|
0
|
|
|
|
9,044,683
|
|
|
(1)
|
The Severance Agreements provide that each executive will be entitled to either the cash severance and health benefit
continuation payments provided under his or her Severance Agreement or under the Change-in-Control Severance Plan (if applicable), whichever is greater. Amounts in the Cash Severance and Continuation of Health Benefits
columns for Ms. Mayer reflect benefits under her Severance Agreement.
|
|
(2)
|
This column reports the intrinsic value of the unvested portions of the executives RSUs that would accelerate in
the circumstances described above. This value is calculated by multiplying $33.26 (the closing price of our common stock as reported by Nasdaq on December 31, 2015, the hypothetical acceleration date) by the number of units subject to the
accelerated portion of the award.
|
|
(3)
|
This column reports the intrinsic value of the portions of the executives unvested stock options that would
accelerate in the circumstances described above. This value is calculated by multiplying (a) the amount by which $33.26 (the closing price of our common stock as reported by Nasdaq on December 31, 2015, the hypothetical acceleration date) exceeds
the exercise price of the option by (b) the number of shares subject to the accelerated portion of the option.
|
|
(4)
|
This presentation assumes that equity awards outstanding under the Stock Plan would be substituted for, assumed, or
otherwise continued following a change in control transaction. If the awards were not substituted for, assumed, or otherwise continued following a change in control transaction (that is, the awards were to be terminated in connection with the
transaction), they would generally accelerate and become fully vested. In these cases, the value of the accelerated equity award vesting would, for each Named Executive Officer and assuming that the change in control and termination of the awards
occurred on December 31, 2015, be the same as the accelerated vesting value set forth above for the Named Executive Officer under the RSU Acceleration and Option Acceleration columns of the table. In those circumstances,
there would be no additional accelerated vesting value with respect to such equity awards in connection with a severance event to the extent the awards accelerated upon the change in control event.
|
60