Yahoo 2007 Annual Report Download - page 131

management other than the executive officers. Target bonuses are set as a percentage of salary for each level of
participant, and then aggregate earned awards are determined based on Company financial performance, and
allocated based on individual performance. For 2007, the management incentive plan was funded at 90% of
aggregate target awards. While the Company’s executive officers do not participate in the management incentive
bonus plan, the Compensation Committee believes that the Named Executive Officers generally should not receive
a greater percentage of their target bonuses than employees across the Company, and took the amount funded under
the Company’s management incentive plan into account in determining the 2007 earned bonuses for the Named
Executive Officers.
The Compensation Committee also generally considers each Named Executive Officer’s bonus for the prior
year. While there is no specific correlation between the levels of the prior year’s annual bonus to the current year’s
annual bonus, the Compensation Committee generally considers prior year bonus information to help ensure
consistency in the Company’s compensation policies from year to year, particularly since the Compensation
Committee’s bonus determinations are subjective.
In determining Ms. Decker’s bonus for 2007, the Compensation Committee also considered Ms. Decker’s
increased responsibilities and successful transition to the role of President of the Company. Prior to becoming
President, she served as the Company’s Chief Financial Officer until June 2007 and headed up the Company’s
Advertiser and Publisher Group, developing its strategy and organization and executing on this strategy. She also
played a key role in executing the Company’s online advertising exchange and network strategies, with the
acquisitions of Right Media Inc. and BlueLithium, Inc., and its platform strategy with the development of its new
online display advertising platform; continued expansion of the Newspaper Consortium; and continued expansion
of the Company’s network of premium publishers. After assuming the role of President, she implemented new
procedures to increase operational efficiency and execution and create synergies across the Company’s consumer
and advertiser businesses. She also worked with Mr. Yang to develop a three-year strategic plan for the Company
and to implement programs for enhancing our culture and vision. As part of the compensation arrangement
established for Ms. Decker in November 2007, her annual target bonus is 150% of her base salary, which was
determined to be consistent with the 75th percentile of peer company practice. Based on the factors considered, the
Compensation Committee determined that Ms. Decker would receive 90% of her target bonus ($1,100,250). This
bonus was for her service as both President and Head of Advertiser and Publisher Group and so was not pro-rated.
In determining Mr. Jorgensen’s bonus for 2007, the Compensation Committee also considered that Mr. Jor-
gensen had successfully transitioned into his new role as Chief Financial Officer and had helped refine the
Company’s business model to support our vision, reorganized the Company’s finance department, and made
significant contributions to the Company’s 2008 operating plan. Mr. Jorgensen’s annual target bonus is 100% of his
base salary, which was determined to be consistent with the peer group median. Based on the factors considered, the
Compensation Committee determined that Mr. Jorgensen would receive 90% of his target bonus ($405,000). The
Compensation Committee determined that it was appropriate to pay this amount, without pro-ration for the portion
of the year that Mr. Jorgensen worked for the Company, in light of the fact that Mr. Jorgensen accepted employment
with the Company in June 2007 and was not eligible for a 2007 bonus from his prior employer.
In determining Mr. Callahan’s bonus for 2007, the Compensation Committee also considered that Mr. Callahan
had made significant contributions by assisting the Company with executive employment matters, including
departures, transitions to new positions and compensation arrangements; successful management of the Company’s
litigation and regulatory matters; successful recruitment of new talent to the legal department; further developing
and strengthening the Company’s public policy, compliance and intellectual property functions; and efficient
management of the Company’s expenses in the areas of his responsibility. The Compensation Committee
determined that he would receive a bonus of $225,000, which was consistent with relative payouts for other
high-performing executives and in the median competitive range for similar positions.
In determining Mr. Murray’s bonus for 2007, the Compensation Committee also considered Mr. Murray’s
significant contributions in global tax planning and strategy, overall cost management, real estate strategies, global
workforce planning, outsourcing of administrative functions, and oversight of the internal controls and tax audit
functions. Mr. Murray did not have a target bonus. The Compensation Committee determined that he would receive
a bonus of $180,000, which was consistent with relative payouts for other high-performing executives.
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