Yahoo!'s Defense of CEO Stock Sales Is Lame: Activist

NEW YORK (TheStreet) -- Yahoo!'s(YHOO Quote) responses to recent criticism of CEO Carol Bartz's stock sales have completely missed the point and appear designed to obfuscate. If she wants to show real leadership, she needs to stop misleading shareholders.

Let's review the recent controversy. Last month, I noted how Yahoo!(YHOO Quote) officers and directors sold $233 million in company stock but purchased only $103,000 worth of shares over the past two years. This was all spelled out in Securities and Exchange Commission filings.

I created a simple spreadsheet tabulating the sales and purchases and published it online. It quickly drew the attention of the media, which primarily focused on how new CEO Carol Bartz has sold almost $2 million in stock in her first five months on the job.

Since then, Bartz denied that she sold anything -- once on CNBC and once at the New York press event at which she launched Yahoo!'s new $100 million marketing campaign.

These sales were not open-market sales but related to the vesting of restricted stock units (RSUs) Bartz received from Yahoo! in 2009 as part of a $10 million "makeup grant" designed to compensate her for options she left on the table when she left her part-time executive chairman role at Autodesk(ADSK Quote) to take the helm at Yahoo! in January.

Bartz's initial tactical response to the criticism about the stock sales seems to have been: "Damn the filings, I'm going to deny, deny, deny." Perhaps she thought that if she denied it forcefully enough, the issue would just go away.

Yahoo!'s public relations team has taken a more nuanced approach. In response to questions from the Guardian and CNBC about the issue, they explained that the sales were due to taxes Bartz owed on the vested stock. Therefore, they suggested, these weren't "real" stock sales and were no cause for alarm for investors.