Bartz's Pay Package Egregious: Activist

Several things should be done to fix this mess:

• To avoid these questions about her commitment, Bartz should put some skin in the game. I think she should buy stock in Yahoo! that represents a significant chunk of her net worth. I would suggest at least half the value of her 2007 exercised options from AutoDesk or $23.5 million. This is not that large relative to the upside she should make from her four years at Yahoo!
• Bartz should immediately pay back the $150,000 to Yahoo! shareholders for her financial advisers who helped her negotiate a $187 million four-year deal for her.
• The comp committee (Art Kern, Ron Burkle, and Frank Biondi) should all resign off the board. Enough is enough.
• Someone else from Yahoo!'s board should explain why Bartz's $3.3 million in unexercised AutoDesk options had to be "made up" for by Yahoo! shareholders to the tune of $10 million.
• Yahoo!'s board should also provide much more transparency on Bartz' employment contract. For example, what cash flow and total shareholder returns targets does she exactly need to hit in order to receive her four times base salary annual bonus and other equity grants and options. If shareholders can't trust the details around the "Make-Up Grant," why should they trust the board's decisions on these other compensation matters?
• Yahoo! should change its comp plans going forward for all executives and directors so that base and target bonuses are quite low -- even lower than the often cited "peer group." How will they attract people? Load up the incentives on the back end. And, instead of having those incentives be triggered by 20 consecutive trading days at a certain stock price level (as Bartz's are), require that the stock stay there for two years (with clawbacks in case it drops back done). This will eliminate short-termist thinking.
• Finally, Bartz should refrain from going on TV in the future saying she "didn't sell anything" after she has sold $2 million in shares.

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