Subpar Semel Slides Out With $500 Million

The company added, "He helped grow Yahoo!'s audience from 170 million to more than 500 million users globally, and oversaw the expansion of our base of talented employees from 3,500 to nearly 12,000."

OK. He did a job.

But the question isn't why Terry Semel got paid a salary. Even a decent one. It's what he did to merit earning what amounts to $282,000 every day for six years. This is, after all, the guy who decided back in 2002 that Google wasn't worth more than $3 billion.

Oops.

Semel was brought in during the dot-com collapse in 2001 to rescue Yahoo! from financial crisis. He succeeded. How? Among his radical steps: Tightening belts, laying off staff ... and actually starting to charge some customers for the company's services.

These, of course, helped the company's bottom line. So, too, did the eventual recovery in the worldwide economy and the tech industry, which has now gone from depression to boom.

Throw in the rally on the Nasdaq, and over the next few years you got quite a bounce in the share price.

I must have missed the moment when half a billion dollars became the new normal. I call it a "Raymond" after the former Exxon boss, Lee Raymond, who walked away with that much loot.

These days a CEO isn't anyone unless he's made a Raymond.

Middle class earnings in America, on the other hand, have pretty much gone nowhere in the last thirty-five years.

Here's the kicker. Maybe paying Semel this much wasn't merely a waste of shareholders' money. Maybe it was counterproductive.

A 64-year old man with $448 million cash in his pocket already has more than he could ever possibly spend. What economic incentive does he really have left? Just how hungry can a really well-fed fat cat be?

The Google boys are young, hungry and have skin in the game. A lot of it.

So, too, does Jerry Yang. The co-founder and "Chief Yahoo!" takes the helm age just 38. Whether he can restore the company's luster remains to be seen. But through the IPO and the bubble he kept $1.5 billion worth of stock and every $1 movement in the share price is worth $54 million to him personally.