Yahoo 2007 Annual Report Download - page 130

Networks, Inc., Network Appliance, Inc., News Corp., Oracle Corporation, QUALCOMM Incorporated, SAP AG,
Symantec Corporation, Time Warner Inc., Viacom Inc., and The Walt Disney Company. Given the breadth of the
Company’s business and the rapidly changing environment in which the Company competes, it is very difficult to
identify comparable companies. Each peer group company is comparable to the Company in certain respects or
areas of our business but not others. Factors such as whether the founders run the company or outside executives
have been hired also affect executive compensation comparisons among peer companies, as well as the way that the
companies structure their top-management organizations. The Compensation Committee believes that the nature of
the Company’s business and the environment in which we operate requires flexibility in setting compensation based
on a consideration of all facts and circumstances with respect to each executive. As a result, the Compensation
Committee does not base its decisions on targeting compensation to specific bench-marks against the peer group.
Instead, the role of peer group compensation data is to generally inform the Compensation Committee regarding
competitive pay levels.
Current Executive Compensation Program Elements
Base Salaries
The Company provides base salaries to executive officers primarily to provide them with a minimum fixed
level of cash compensation each year. Salaries for our Named Executive Officers are generally reviewed by the
Compensation Committee on an annual basis. As noted above, base salary levels are generally intended to be
consistent with competitive market base salary levels. The Compensation Committee sets base salaries so that the
most substantial portion of the executives’ total direct compensation remains dependent on performance-based
annual bonuses and long-term equity awards. In setting specific salary levels for each Named Executive Officer and
the Company’s other executive officers, the Compensation Committee considers, among other factors, the
executive’s scope of responsibility, prior experience, past performance, advancement potential, impact on results,
salary relative to other executives in the Company, and relevant competitive data. The Compensation Committee
does not target compensation levels to specific bench-marks against its peer group.
In connection with her promotion to the position of President, Ms. Decker’s annual base salary was increased
from $500,000 to $815,000, effective July 1, 2007. Mr. Jorgensen’s annual base salary was set at $450,000 upon his
joining the Company in June 2007. Mr. Callahan’s annual base salary was increased effective April 1, 2007 from
$325,000 to $360,000, and Mr. Murray’s annual base salary was increased effective July 1, 2007 from $340,000 to
$360,000. On March 3, 2008, the Compensation Committee increased the 2008 annual base salary levels of
Messrs. Jorgensen, Callahan and Murray to $500,000, $420,000, and $375,000, respectively. The Compensation
Committee determined that these increases were appropriate based on its general assessment of individual merit and
the factors noted above.
Annual Cash Bonuses
The Compensation Committee believes that it is important to retain flexibility and discretion in determining
executive bonuses given the dynamic nature of the business. Accordingly, the Compensation Committee has not
historically established any specific quantitative Company or individual performance objectives, or any prede-
termined qualitative performance objectives, that must be achieved in order for a Named Executive Officer to earn
his or her annual incentive compensation. Instead, the Compensation Committee’s decision regarding the annual
incentive bonus to be paid to each Named Executive Officer is subjective. Factors considered by the Compensation
Committee when determining the annual incentive bonus to be paid to a Named Executive Officer are the
Company’s overall financial performance, achievement of strategic operating objectives, each Named Executive
Officer’s individual performance during the year, and Mr. Yang’s general recommendations and performance
evaluations. Bonus decisions are the result of the Compensation Committee’s overall assessment of performance
and not related to any single specific goal or achievement. The members of the Compensation Committee have
interaction with all of the Named Executive Officers frequently throughout the year and form their own subjective
views on the executive’s performance throughout the year, which plays a factor in the Named Executive Officers’
compensation arrangements.
Another factor considered by the Compensation Committee in making its bonus decisions for the Named
Executive Officers is the percentage at which the Company’s management incentive bonus plan is funded for the
corresponding year. The management incentive bonus plan is maintained by the Company for members of
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